The Personal Finance Society (PFS) launched a new Good Practice Guide today (22nd January 2025), aimed at advisers regarding economic abuse and life insurance.
The guide was created as a resource for advisers looking to enhance their understanding of how to support clients facing abuse.
It explains how firms can leverage their financial expertise to curb opportunities for abusers to misuse financial products.
Research by Surviving Economic Abuse (SEA) found that one in seven women in the UK experienced economic abuse from a partner in the past year.
The PFS developed the guide following a report from SEA in 2023, which highlighted that life insurance policies can be hard to separate without consent from both parties, potentially enabling control over victims after separation.
The guide also outlines how to set up trusts to reduce their use in abuse.
It includes recommendations for advisers to collaborate closely with life insurance providers to benefit victim-survivors.
Carla Brown, president of the PFS Board, said: “The aim of this Good Practice Guide is to provide a starting point for advisers either looking to refresh their knowledge of economic abuse or to explore further how they can support clients experiencing economic abuse.
“The financial services profession has a crucial role to play in this and whilst we understand how to use financial tools to get the best for our clients, we should also be able to identify and avoid policies or products which perpetrators might use to facilitate economic abuse.”
Sam Smethers, interim CEO of SEA, said: “Domestic abusers use every tool at their disposal, including insurance products, to cause devastating economic harm to victim-survivors, often undisrupted and without consequence.
“Time and time again, we hear about abusers weaponising life insurance policies to control and coerce victim-survivors, trapping them in fear for their lives.
“Tragically, there are cases where abusers who are policy beneficiaries have been incentivised to kill.
Smethers added: “Financial services play a vital role in supporting customers experiencing economic abuse.
“This new guidance will help insurance advisers close down opportunities for abusers to cause harm and help victim-survivors access economic freedom and safety.
“We look forward to working with the industry to transform its response to economic abuse and hope it will join us in calling for the changes in the law needed to stop abusers in their tracks.”
