What is a vulnerable client and what should you do when you encounter one?

“We used to have to get clients who we would identify as vulnerable to sign a form confirming that they were vulnerable and that they understood what that meant. So any client who was over 70 had to sign this form… I had a client who was a multi-millionaire, and she was not happy. She was 71 years old. I was advising and she took real offence and I get why. So I think that whole language point is a really big thing. I don’t think we’re in that position of getting people to sign forms like that anymore.”

“My company specialise in providing protection advice for people who live with pre-existing health conditions. So as you can imagine, we see a lot of vulnerable customers or a lot of potentially vulnerable customers. The problem that we’ve always found is that vulnerability is subjective. And I think that the way the chat and the conversations have gone today exactly shows and demonstrates that because what one firm describes as vulnerable, another might not.”

“If we were to treat every customer that we’ve got with a medical condition as vulnerable, then literally every single one of ours would be treated as vulnerable… And actually then that almost devalues the ones who really are vulnerable, who really should get your attention. So the challenge we faced was, how do we determine those ones who really need to be flagged and addressed, rather than it just being in relation to a medical condition, and that doesn’t even go onto the financial vulnerability. The whole piece around vulnerability is making sure that people are not mis-sold to or taken advantage of and that they’re given support.”

“The problem is there’s not a lot of support out there. If you read the FCA guides and stuff on it, it’s all very vague. It gives you ideas, but nobody actually tells you this is what you should be doing.”

“The average reading age in the UK is nine. So again, that’s going to actually affect a lot of people. But even digital skills as well, for example, ability to use a computer. So again it sort of feeds into that whole thing of everyone could be vulnerable if we’re not careful.”

“We don’t ask clients this list of questions, but there are prompts for the advisor to run through afterwards and say, ‘Is there anything on here that would deem this person vulnerable?’ Things like, ‘Has the client recently lost a close family member or friend? Have they had a close family member or friend who’s recently been diagnosed with a serious medical condition, such as cancer? Are you aware of a learning difficulty or a behavioural difficulty? Things like autism, dyslexia, ADHD or dyscalculia? Is there a language barrier with the customer?’… One of the big things with vulnerability is not asking people to repeat themselves, if it’s mental health, if someone’s lost someone, you don’t want to ask them to reiterate that.”

“We’ve gone from probably a couple of years ago where it was quite manual, to now being actually somewhat automated with a manual process built. We do annual training on vulnerable customers. We’ve also got a number of mental health first aiders in the office as well. So we’re not a huge office, but we decided because we speak to so many people with mental health difficulties, that if we do get someone who we are worried about on the phone, we would want to be able to pull the support of a mental health first aid.”

“I don’t know whether anyone else has counted, but if you were to look at the consumer duty paper from the FCA, it’s got 85 pages and vulnerability appears in 40 of those. So it’s very apparent that it’s a kind of golden thread running through everything that they’re looking at. At the heart of it, the experience for a vulnerable customer should be as good as anybody else’s. We identify, we engage, support and signpost.”

“Some people were making some very good points about sometimes the difficulty of customers being faced with tricky personal, possibly seen as intrusive questions. So one of the things we do is offer, and we’re not alone in offering this, is delegated underwriting. So you can send a link to the customer rather than have to kind of face going through that. We found that there are a number of people who commented, they found it easier to do that, and not everyone wants to do that. I can recognise that for some advisors, that will be seen as giving away a degree of control. But for some customers, particularly in vulnerable circumstances, that can be seen as very positive.”

“So all of it, I think, is recognising that there is not one answer to this. It’s going to be dependent very much on the individual circumstances of the person involved.”