How can advisers pinpoint client vulnerability?

Speaking at yesterday's National Later Life Adviser Conference, Farmer said that advisers have a duty of care to recognise the potential vulnerability of their clients, but that it can be difficult to assess because of its likelihood to change.

He said: “Vulnerability is fluid in nature and comes in a range of guises. Clients can be okay one day and not the next. They can move from a situation of temporary vulnerability to sporadic vulnerability to permanent vulnerability.

“Every client you see is potentially vulnerable and potentially susceptible; they can switch from being potentially vulnerable to being vulnerable to being highly vulnerable. And they also change between those states. The big question is how you as an adviser can pinpoint what is going on with them?”

He added that advisers had to understand their client fully to ascertain what stage or state they may be at. “You need to get to know them, to get to know their key life stages, because that will impact the advice you give, and influence their next life moments,” he said.

Farmer said that utilising the skills of a third-party assessor might head off potential difficulties for both adviser and client in the future. “To a client you can say that by doing this, we’re evidencing that they know exactly what they’re doing, “ he said, “and that if it’s challenged in the future, we have that evidence available to deal with the challenge.”