Expert and Facilitator: Kathy Ellison, Director, Savanta
Headlines:
- When it comes to assessing and documenting client vulnerability, there is debate around the best ways to do it, including whether direct questions should be asked
- Some felt regular documentation provides a good audit trail. Others argue natural conversation works better than questionnaires
- Advisers tend to deal with wealthier clients and many truly vulnerable customers are not currently seeking advice, especially those who are financially resilient or with lower capability
- Education is seen as key to addressing this as well as other solutions outstand the adviser community
- Transient vulnerabilities like bereavement are harder to identify than permanent ones. Some argue vulnerability changes over time so regular reviews are important
- There are differing views on whether AI or tech tools would help or hinder with vulnerability assessments. Some see potential but other warn against over-reliance
Discussion points:
The session discussed the key topics around vulnerability in financial advice, particularly how advisers assess and deal with client vulnerability, including during major life events like bereavement.
There was debate around whether vulnerability should be specifically tracked and documented. Views differed on whether explicit questions should be asked to identify vulnerability.
There was discussion around how transient vulnerabilities like bereavement are harder to identify than permanent ones. Recording client meetings is suggested by some as an approach. The role of technology solutions is debated - some potential can be seen but others were concerned about over-reliance on tick box approaches.
There were also questions around how adviser vulnerability affects advice quality.
Advisers tend to deal with wealthier clients, while many vulnerable customers do not currently seek advice. Educating the public more broadly is seen as part of the solution here.
Key takeaways:
- Review your processes for identifying and documenting client vulnerability - can this be enhanced?
- Consider whether recording client meetings may provide useful evidence around vulnerabilities
- Ensure your training includes guidance for advisers on identifying transient vulnerabilities
- Review whether you need to amend your advice processes for vulnerable advisers
- Explore options for providing cut-down advice services or broader guidance to less wealthy clients
