Client vulnerability training at Informed Choice
As Financial Planners, we have a privileged position of trust with our clients, throughout different times in their lives.
From time-to-time, many of us experience vulnerability in one of its forms.
This vulnerability can be temporary or permanent, affecting our ability to ability to make sensible financial decisions.
A state of vulnerability can also make us more susceptible to fraud or scams.
This afternoon, the Informed Choice team worked through a virtual workshop about client vulnerability; learning how to spot the signs of vulnerability, its implications, and the steps we can take when client vulnerability does occur.
Client vulnerability is a hot topic for our regulator, the Financial Conduct Authority (FCA).
Of course, we want to ensure we have in place robust procedures for dealing with client vulnerability for more than demonstrating regulatory compliance; we recognise our trusted position creates the impetus for us to do the very best for our clients.
According to the FCA, more than 24 million people display one or more potential characteristics of vulnerability.
These potential characteristics include physical and mental health issues, recent life events such as bereavement, capability and financial resilience.
Leading our workshop this afternoon, my colleague Philip Wise referenced scientific research which found that our financial capacity reduces by 2% a year from age 60 onwards.
Worryingly, our levels of financial confidence do not tend to decline with age, so we find ourselves in the inevitable position of being less able to make decisions about our money, but making them with the same level of confidence as before!
While age-related cognitive impairment is not the only indicator of vulnerability, it was interesting to learn about the implications of ageing when it comes to making financial decisions.
The extraordinary circumstances we’re living with during 2020 will undoubtedly push up occurrences of client vulnerability, with rising levels of mental health issues one indicator of the challenges to come.
As a team, we will continue to work together to identify and mitigate incidences of client vulnerability, doing our best for our clients who find themselves in difficult positions, to ensure they are treated fairly.