Most clients who experienced vulnerability did not tell their financial advisers but would be more likely to do so if the advice firm had taken proactive steps to educate and advise them, research in the attached press release among over-45s by Just Group reveals.
The retirement specialist found that seven in 10 (72%) had experienced one or more life events that could result in vulnerability such as physical or mental health problems, bereavement, job loss or relationship breakdown.
But of those, only 16% mentioned the circumstances to their adviser.
Stephen Lowe, group communications director at Just Group, said: “Among the reasons given for people not to mention it was that they felt it was not relevant to their adviser or future plans, that they weren’t asked, or they were just embarrassed.
“Clients seem much more likely to talk about their circumstances if the adviser has previously highlighted it as important and expected. That means touchpoints such as reviews and communications should be used educate and reinforce the message about vulnerability.”
Those clients who had disclosed their circumstances to advisers met with a mixed response.
Positive comments included people saying the adviser was more understanding about the client’s emotional situation after marriage break-up, were more compassionate and more sympathetic to those impacted by illness in the family.
However, in about a third of cases they said disclosure made no difference.
Lowe said that some important conclusions could be drawn from the research about how a firm
could go forward with their vulnerable customer strategy in future.
“Clients seem much more likely to talk about their circumstances if the adviser has previously
highlighted it as important and expected,” he said. “That means touchpoints such as reviews and communications should be used educate and reinforce the message about vulnerability.
“While the majority may react positively to this kind of active engagement that still leaves a sizeable rump of clients who still may resist. There is an opportunity for the industry to keep working together and sharing best practice to ensure we can meet our regulatory responsibilities.”
He said it was important that clients who do divulge vulnerable circumstances are made to feel they made the right choice in terms of extra care and attention they receive.
