Clients more likely to divulge vulnerability to proactive advisers

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.

The research shows many clients would be more willing to divulge information about vulnerability if their advice firm was more pro-active with engagement and education. Among the ideas that found favour were providing clients with checklists, emphasising the importance of disclosure and asking more questions.

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.

Stephen Lowe, group communications director at Just Group, said: “There is increasing scrutiny on advisers to identify and support vulnerable customers but the research shows the majority of people are unlikely voluntarily to divulge their own vulnerability.

“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.

“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.”