BR Guide Second Edition

Bereavement Health issues Technology issues 40% of older people in GP clinics have a mental health problem. The same proportion of over 65s have a long-standing illness. 1 in 14 over 65s have dementia of some kind. In England, only 68% of people with dementia have had a diagnosis. In other words, there is a chance a client may have a neurocognitive disorder, and not know it themselves. Older generations are less confident about their ability to use the internet, and are also less likely to use it. 35% of people over 65 never use the internet, 1 with a correlation between people using less internet as they get older. While web portals and online chat functions are a useful tool, there is a risk of older clients getting left behind, and struggling to understand the new technology. According to the FCA, bereavement has the potential to leave many women over 65 in a potentially vulnerable financial position. According to the regulator, a significant proportion of women in this demographic delegate all or much of their financial decision- making to a spouse or partner. Therefore, the death of their partner will not only have a financial impact, but will also thrust them into making financial decisions at a difficult time. Social issues Loneliness increases with age, the loss of friends and poor health. 17% of older people report they are in contact with family, friends and neighbours less than once a week. According to Age UK, persistent loneliness can have a significant negative impact on well-being and quality of life, and has been variously attributed to an increased risk of dementia and cardiovascular disease. 79 78 WORKING WITH VULNERABLE CLIENTS WORKING WITH VULNERABLE CLIENTS Where Advisers Go Wrong Given the breadth of causes of vulnerability, it can be a bit intimidating. However, the FCA has named a few common pitfalls which can be avoided: STAFF Frontline staff are the first point of contact for clients. Specialist vulnerable client teams have their place, but if frontline staff are not trained to understand and deal with a situation involving a vulnerability, the opportunity for a good outcome may be missed. Frontline staff need sufficient training to at least facilitate proper conversations, know where internal expertise lies, and also how and when to refer clients on to them. SYSTEMS Systems designed to ‘streamline’ the client experience risk not meeting the requirements of those with non-standard needs, and not working for those who don’t fit the mould. INFORMATION Clients might find themselves overwhelmed by complex information. They may also find it difficult to distinguish between promotional material and important messages about their investments. RULES Vulnerable customers may need flexibility when being handled. An overzealous implementation of rules may leave vulnerable customers isolated and unable to use a product or investment they are actually suitable for. VALUE There could be a perception that vulnerable clients are not worth the risk or the extra time or training. In fact, they can become valuable clients if given appropriate support. If isolated, they may withdraw from the market altogether or their situation may spiral, which would not be considered a good outcome. WORKING WITH VULNERABLE CLIENTS Although the definition of vulnerability is broad, in many cases relatively simple steps can make a big difference to vulnerable clients. The International Organisation of Securities Commissions (IOSCO), for example, gives two ways financial advisers can help: 1. Offer support to senior investors experiencing a life event during the product lifecycle. 2. Provide training and support for employees of financial services firms. A widely held opinion is that these types of issues need to be tackled throughout a company, starting at the top – at Boardroom CAUSES OF VULNERABILITY IN THE ELDERLY 1 https://www.fca.org.uk/publication/research/financial-lives- survey-2017.pdf level. This can help ensure a consistent approach to vulnerability is embedded throughout the company, across all operations, as opposed to different teams having different approaches, policies, or methods of implementation. For advisers who have not looked at how they handle vulnerable clients before, a sensible place to start might be to conduct an audit of current practise. This might also be worth doing if policies were put in place some time ago. As this suggests, an ongoing evaluation of the effect of a vulnerability strategy can play a significant role. For example, it might help spot any unintended consequences.