The biggest barrier financial advice professionals face when trying to support consumers is being able to openly discuss the nature of an individual’s vulnerability with them, research across Chartered Insurance Institute and Personal Finance Society members has found.
A total of 36 per cent of professionals polled said they struggle to talk about the nature of vulnerability with the individual affected.
Being able to assess cognition was identified as the biggest barrier to assisting clients in vulnerable circumstances by almost a third of the financial advisers who were surveyed.
One in 10 financial advisers revealed they struggle to identify vulnerability and around one in five revealed they worry about grasping the needs of clients in vulnerable circumstances.
At the start of 2021, the Personal Finance Society launched an independent Financial Vulnerability Taskforce with the aim of supporting the profession to better recognise and address the various forms of consumer vulnerability, improve client outcomes and increase access to financial advice.
The taskforce will promote greater understanding of clients in vulnerable circumstances and encourage appropriate behaviour through the sharing of good practice while also addressing the expectations of regulatory standards and public expectations.
Financial advisers wishing to adopt the Financial Vulnerability Charter must commit to nine core consumer guide pledges.
Keith Richards, chief executive of the Personal Finance Society and Chair of the Financial Vulnerability Taskforce, says: “Covid-19 has shone a light on how quickly anyone can find themselves in vulnerable circumstances. Vulnerability can manifest itself in physical, mental or an emotional form, is dynamic in nature – short lived or longer term, sometimes permanent, transient, recurring or fluctuating over time – and may be hidden.
“If the profession is to be considered a safe pair of hands, we must recognise the signs of clients in vulnerable circumstances, rather than seek to label individuals as vulnerable clients. It is important that we all develop a heightened awareness of the indicators of vulnerability and have the knowledge, skills and processes in place to enable appropriate and professional safeguarding, support and advice.
“Most of us will be vulnerable at some stage in our lives. It is vitally important that financial advisers recognise the complexities and uniqueness of an individual’s vulnerability and how it impacts on them if we are to support them in the most appropriate way.”
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