Supporting clients with vulnerabilities: How brokers can help

With soaring inflation and the cost-of-living crisis worsening, individuals are being increasingly exposed to financial instability and the pandemic has highlighted just how quickly personal health can change, too. In fact, figures from the FCA show that almost 28 million UK adults are now deemed vulnerable in some form, encompassing a huge spectrum from permanent to short-term vulnerabilities.

Perhaps unsurprisingly, financial vulnerabilities in particular are on the rise and with the economic situation not likely to see any sort of quick fix, this necessitates urgent questions for brokers – how can they reassess clients? What signs might indicate a vulnerability in a new or existing client? How can they support all clients to deliver the best possible service?

With the new Consumer Duty deadline fast approaching, answering these questions is vital and gives brokers the opportunity to cement themselves as an invaluable source of help for all. Doing so means shifting the process slightly, and making it all about communication.

Vulnerability drivers

For any broker, the first step to identifying a vulnerability is being aware of the four key drivers: health, life events, resilience and capability. All of these drivers impact a client’s ability to cope with or make important decisions that have a real impact on their lives, such as taking on the financial commitment of a mortgage.

Health conditions such as physical or mental disability can impact a clients ability to both receive and understand the full scale of the financial commitment they are undertaking. Things like a shift in financial circumstances, personal loss and low emotional resilience fit into the life events and resilience drivers, and have the potential to be temporary, but are important to identify and address nonetheless given the impact they can have and the fact that brokers are likely to see an uptick in these categories thanks to the ongoing crises facing so many UK adults.

Taking action

Whichever category they fall into, vulnerabilities are complex and sometimes difficult to identify. For instance, clients struggling with their emotional wellbeing or cognitive thinking may not show physical signs.

As such, listening out for auditory clues and looking for visual signs is vital. These can change depending on the type of communication – face to face meetings might allow a broker to pick up on uncertain body language or hesitation, while email exchanges allow brokers to spot unclear or inconsistent writing and calls might make long pauses more obvious. Making a note of these potentially more subtle nuances is vital. Brokers need to consider whether these identified vulnerabilities impact the client’s decision-making and if they are able to knowingly commit to and manage a mortgage long term. Not providing clear and accessible support for such vulnerabilities, fails to comply with new FCA Consumer Duty requirements.

It’s also essential that brokers tailor their service to meet the clients’ individual needs and circumstances once vulnerabilities have been identified. This will help to foster a positive working relationship, making all clients feel valued, whilst laying potential foundations for repeat business in the future. But, how can brokers best engage clients with vulnerabilities and create a comfortable environment?

1. Empathise: Be considerate of clients with vulnerabilities. Allow them time to make decisions without patronising them or making judgemental assumptions.

2. Explain: Offer clarity that a vulnerable status will not deny the client the services or products they need or negatively affect their case. The information is intended to provide the best possible and most relevant support to the client.

3. Guidance: Provide consistent guidance to clients and check they understand throughout the process. Being patient and empathetic will lead to a more positive outcome for the client.

4. Clarity: Use clear plain English and maintain pace at that of the clients. If required, offer information in short segments, or the presence of a familiar third party.

5. Additional support: Be prepared to spend more time with clients who need additional support and make sure they are aware of the range of further assistance available.

Clients are making huge, life changing decisions when they approach a broker for advice, so knowing and understanding how to identify vulnerabilities and support these clients will ensure brokers can tailor their conversations appropriately. Identifying a vulnerability is not a blocker to serving a client, but a way of ensuring that every customer can experience the best possible outcome.