"Three-quarters of older homeowners would welcome support if they were vulnerable which should act as a reassurance to advisers as they have these conversations with their clients."
With the FCA's consultation on the fair treatment of vulnerable customers set to close today, new research from more2life found that both advisers and customers want more support around vulnerability.
As part of the FCA’s wider ambitions to support vulnerable customers, it has also proposed introducing a duty of care for advisers helping these customers (i.e. a legal obligation for advisers to act in the best interest of their clients and exercise reasonable care and skill when providing a product or service). 82% of advisers support this although many believe that this should already be part of a firm’s approach.
With advisers keen to provide enhanced support for their customers, they are looking to lenders and the rest of the industry for support. The vast majority (81%) believe there is a need for greater education and more resources to provide them with practical guidance on how to spot the signs and deal with vulnerable clients. In addition, 73% felt that there was more the industry could do to make equity release literature clearer and easier to understand.
When more2life asked homeowners aged 55 and over how they would react if their adviser offered them support because they thought they were vulnerable, three-quarters (74%) said they would be comfortable with this.
However, even though the majority of older homeowners would welcome additional support in this area, close to a fifth (19%) said they do not need any help and 21% said they would only welcome this assistance if it did not slow down the application process. 27% said they would question why their adviser thought they, or a family member, are vulnerable, while just under one in ten (8%) would be ‘upset’ at being regarded as vulnerable when they are not.
more2life’s research also revealed that close to a third (30%) of homeowners over the age of 55 have felt vulnerable when making a financial decision. Moreover, the likelihood of vulnerability is thought to increase as people age, with two in five (40%) homeowners agreeing that, as people get older, they are more likely to be vulnerable. Feeling vulnerable was also more common among women over 55 (32%) than men (28%).
Dave Harris, CEO of more2life, commented: “Vulnerability is a tricky topic for advisers and lenders as while we are committed to supporting people who need additional help, clients may very well not identify themselves as being vulnerable. So the challenge becomes helping them make the right financial choices for both the short and the long term while at the same time encouraging them to realise they may be vulnerable and that this is entirely okay.
“Today’s research suggests that three-quarters of older homeowners would welcome support if they were vulnerable which should act as a reassurance to advisers as they have these conversations with their clients. That said, there is still a disconnect between believing that vulnerable people need more support and being vulnerable themselves so advisers are keen for more resources and tools to help with these tricky conversations.
“As a responsible lender, we are committed to making sure our customers are making the right decisions for the right reasons and supporting advisers in recognising vulnerability. It is for this reason that we strongly welcome the FCA’s guidance on vulnerability to ensure the best outcomes for customers in the equity release market.”