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Nick Bamford: Are you noticing vulnerability?

The ageing population means we are likely to be dealing with more elderly people. Although the term “elderly” means different things to different people, we must be careful of vulnerability here.

In fact, the FCA definition of a vulnerable client is broad: “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”

We held a panel discussion on this subject at the recent Money Marketing Retirement Summit, from which some pertinent stories emerged.

I was fascinated by Laurus Associates director Karen Barwick’s account of one of her long-standing clients, who regularly asks her to describe the detail in the reports she prepares for him. Over time, she noticed how engaged he was, hanging on her every word. It was only much later she discovered he was highly dyslexic and unable to read the reports at all.

Compliance tip: Remove the gap in your approach to vulnerable clients

It is not easy for people to disclose problems like this and we debated the importance of our soft skills in uncovering such personal issues.

Gentle perseverance seemed to be the most accepted approach. I relayed the story of my client who, over a decade, I had met and interacted with on many occasions. When I phoned him one day, however, he had no idea who I was.

He was a single man living alone with no living relatives, and it concerned me so much I contacted the social services department of the local authority. I was relieved to discover he was on their radar. They have now taken over the process and we have helped reduce the risk of a scam by notifying his investment and pension providers to be extra diligent if anyone tries to make withdrawals.

I also told the story of a new female client going through a divorce who showed up for the discovery meeting with three friends constituting her “support group”. Many attendees agreed there are circumstances where having a trusted party attend with the client protects against any future claims of inappropriate advice.

But this was turned on its head by one delegate who warned of people being financially abused by those closest to them. Fellow panellist, Jane Smith Financial Planning’s Nicola Watts, told of a female client who had struck up a new relationship and almost immediately raised their joint dealings with her finances.

How to leave a legacy for vulnerable adults

There are just so many circumstances where vulnerability can occur – physical and mental ill-health, bereavement of a loved one, divorce and old age all raise potential.

To illustrate just how distracting a vulnerability can be, I offered the audience a practical example of the ageing process by getting them to close their eyes and then try to balance on one leg. A moment of fun perhaps but I hope it came with a serious message, too.

We considered ways to ensure we were communicating with vulnerable people appropriately: listening carefully and phrasing questions without technical descriptions or jargon were widely agreed as vital.

Vulnerable people deserve our protection both at a professional and personal level.

Nick Bamford is executive director at Informed Choice


Phil Deeks

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  1. We are all vulnerable at different times and what we as advsiers need to do is recognise when and where a client is vulnerable and adjust our ways of working when appropriate.
    I had a client who we concluded was illiterate and too embarassed to tell us so rather than make a big issue of it, we just made sure everything was covered verbally with understanding confirmed as we went along. We’ve also had blind clients and lastly the most common one is where couples split up and whilst ti might appear counetr intuitive when we one eprson of the couple has tended to drive all financial decisions, it’s invariably been agreed we’d advise the one who knows nothing about their finances when they seperate rather than vice versa (and sometimes we remain advsier to both if they are happy with how we manage the conflict of interest)as they need more support than the one who’d driven the finances before.
    What teh FCA appear to fail tyo recognise is that unlike big providers, advisers in small firms are vulnerable and can put awful stresses on an adviser who has to continue to work, when the provider’s staff member and director can just go sick (as Hector Sants did with Barclays). The rest of us just have to get on with it as our clients rely on us and even with a locum or 2nd or 3rd adviser in the firm, people buy people and hence they want THEIR adviser.

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