Whilst spotting and protecting vulnerable clients was challengingbeforehand, moving to a digital-only environment has made itaneven toughertaskfor advisers.
Stuart Wilson is corporate marketing director at more2life
Since the start of the coronaviruscrisis,the later life lendingindustryhasworked hard to ensurethatitremainsopen for business, withlendersand advisersmakinggreat stridesinovercomingthe operationalchallengesthat have arisenbecauseof the pandemic.
Thesehaveincludedtransitioning toremote working,adapting toreduced staffnumbers,andensuring thatthe needs ofboth new and existing customershave beenmetduringthe crisis.
However,anotherchallenge whichhas beenpushedfirmlyintothe spotlightsince the start of the crisisis vulnerability.
Whilst spotting and protecting vulnerable clients was challengingbeforehand, moving to a digital-only environment has made itaneven toughertaskfor advisers.For the later life lendingsectorworkingto identify and support vulnerable customers is more important than ever,as we navigate through this crisis.
Coronavirus has broadened the meaning of vulnerability
The FCA’slatestFinancial Lives Surveyfrom2017suggested that 50%of UK adultsdisplayed characteristics ofpotentialvulnerability.Thismeans thatin 2017,roughly25.6millionBritswere thought to be vulnerable.
Three years on and amid a global pandemic,thefigureis likely tobe much higher.In fact, recentdata from money management platform,Yolt, revealed thatamong those aged 55 and over,over a fifth (23%) have been made to feel financiallyinsecure since the start of thecoronaviruscrisis.
Asolder householdscontinue to beimpactedby theeconomic fallout of the pandemic, those who might not have been vulnerable before couldvery wellbe now.
As such, the later life lending marketmustcontinuetoshinea light on theissue of vulnerabilityto ensure betteroutcomes for customers.
Lenders are on the side of advisers
With new more2life research revealing that around a fifth (21%) of advisers are now treating all clients as vulnerable, it’s clear intermediaries have taken a proactive approach to this issue.So,whatarelenders doingto helpadviserstacklethe issue ofvulnerability in the equity release market?
Inrecent weeks,manylendershave launchedfreelearning tools and resources to help advisersdetect vulnerability in a digital-only environment.Lender-hosted webinars haveproveda good starting point for those looking to build their confidence in this area.
Helping advisersadapttohow they gather information– especially soft facts -abouttheirclients’circumstances and lending needs in a digital worldissomethinglenderscanalso providea helping handwith.
This is particularly vital as providing telephone or video-based advice may only have become part of an adviser’s offering since the start of lockdown.
As such, building experience and confidence in thisareawillhelp advisersbetteridentifyvulnerable clientsduring the crisis, as well as helpcustomersbetter understand their own vulnerability.Pre-prepared scripts of questionsareonewaytoachieve this.
Maintaining quality of advice remains crucial even in these extraordinary circumstances.For advisers lookingfor support orto get a second opinion, there are third-party resources available to help.
For example,more2life has worked collaboratively overa number ofyears with Tim Farmer, a mental capacity and vulnerability expert whose firm,TSFConsultants,specialisesinvulnerabilityand canprovideremote capacity assessmentsforadvisers.Seeking guidance from external firmslikeTSFcan offerequity release adviserssome additional steer on how to best approach potentially vulnerable clients,ensuringtheir recommendationslead to the right outcome.
Looking forward
Continuedsupport from equity release lenderswill becrucialto ensure that the needs of vulnerable customers are met,as the crisis progresses.
One thing thepandemichasshown us is just how quickly clients’ circumstances can change, highlightingthe importance ofregular,vulnerability assessments,particularly when dealing with older borrowers.
Advisers must feel confident in their ability tounderstandthe wider context of their clients’ circumstancesto ensurethe recommendations they give supportcustomers’best interests. And,lenders will continue to play an important role insupportingmanytodo so,both duringthe current crisisand long afterit has passed.
