We’ve all of us experienced a turbulent couple of year, in terms of our health, our wealth, our work and for many, our financial wellbeing. Many clients are facing new situations, whether enforced or voluntary, and contemplating new beginnings.
Sometimes this can be a leap into the dark, which can be destabilising and leave them feeling insecure and lacking control.
This can all lead to a feeling of ‘vulnerability’, which might be in addition to more specific or situations where clients could also be classed as vulnerable.
As Graeme Stewart highlighted in a recent post, the FCA recently put the number of vulnerable consumers at 27.7 million people, taking the proportion to 53% of all adults.
Keith Richards, Chair of the PFS Financial Vulnerability Taskforce, says that now is a good opportunity to consider how we are all adopting the principles of the charter and embedding them within processes and client outcomes.
A new ‘good practice’ guide authored by Professor Keith Brown and endorsed by Craig Tracey MP on behalf of the All-Party Parliamentary Group will be issued soon.
But in the meantime, how are we doing?
Client vulnerability processes
We’ve always been proud of our client-centric approach. We have a culture where ‘Doing the right thing’ always comes first; it’s embedded across our business, from the accountancy division through to wealth.
Like many firms, we recently signed up to the Financial Vulnerability Taskforce because we always want clients to feel we’re a safe pair of hands, that they can be open and honest with us, and rely on us in the most difficult times. That’s the environment we wish to create, and one we work hard to preserve.
One example of this is that every member of our team has individually completed in-house training with our Risk and Compliance Manager as well as the CISI Vulnerable Client Course.
This ensures that not only financial planners are trained in this area, but that every team member who may have contact with clients can identify where there may be potential vulnerability.
We have systems in place to allow clients viewed as vulnerable to be captured from an MI perspective, and advisers are asked to consider what they plan to do differently with clients who have been assessed as being in a vulnerable situation/circumstance.
Any time a client looks to make a withdrawal from an investment, the adviser explores the reason for withdrawal in more detail with the client – this allows us to potentially identify if a client is being scammed.
Overall, we challenge ourselves to demonstrate how we ensure fair treatment.
So how does this play out in practice?
A good example might be taken from a client who we recently supported through a life-changing time.
We’d worked with Cath and Graham, managing directors of a large engineering business, as a group over a number of years, assisting with accountancy, pension planning and creating an exit strategy.
It was during the exit strategy work that Graham was suddenly diagnosed with pancreatic cancer. He was perfectly fit and healthy at the time, so it was an utter shock to us all. Ever practical, just a week after he was diagnosed, he arranged to meet with us.
Cath says: “It was at this point that we saw them as working with us not for us. For me it’s an important distinction. The team were completely on our side.”
So what did we do?
A week later, my colleague Amanda had pulled everything together including lawyers and a list of decisions that the couple needed to make regarding the exit. These decisions were all done and dusted within two meetings.
We were able to provide complex support from across the board. It’s important to us that although it can be complex at our end, Cath’s experience of this was of it being all under one roof – with one point of contact, one set of contact details – to make everything as frictionless as possible for her.
We continue to help Cath plan her future. As she says: “I call AAB ‘solutions architects’. If you have a problem that’s where you go – they’ll tell you ‘This is who we’re going to give you, and more importantly, this is what you need.’ This is so important because you don’t always know what your next step should be.
“My future is not what I wanted, so I have to look at my own road map and decide what I want to do. This means there are lots of changes to be made yet, and just knowing that AAB can facilitate all of these solutions gives me a great deal of comfort.”
It’s important to get the right balance between enough information and the space and freedom to feel confident about making their own decisions. Nothing different from any other client you might say, and I’d agree.
But all in all, we think it’s important that all members of our team – not just planners – feel confident in their responsibility for protecting vulnerable customers, so that we can all play our own part in providing the highest levels of service, ethical standards and integrity towards clients, every single time.