We know that everyone faces challenges and setbacks at some point in their lives. From living with a disability, to coping with grief or battling a mental health problem. There are all sorts of reasons why somebody’s ability to make sound decisions about their finances could be impaired. HB&O Financial Services are fully aware that we may have clients facing these challenges, and we work hard to provide them with all the additional support they need in order to achieve the best possible outcomes.
Clients in vulnerable circumstances may be significantly less able to represent their own interests and more likely to suffer harm. Vulnerability can affect the way people interact, but is particularly challenging in financial services, partly because of the long-term nature of commitments and partly due to the complexity of products and information.
The FCA define a vulnerable consumer as:
“Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”
Using the Financial Lives Survey 2017, the Financial Conduct Authority defined consumers as ‘potentially vulnerable’ according to the answers they gave to specific questions in the categories below.
Health - UK adults who say their ability to carry out day-to-day activities is reduced significantly through health conditions or illness – 5% fell into this category. For example, this could include a consumer struggling with memory loss who struggles to carry out day-to-day activities as a consequence
Resilience - UK adults who lack or have low financial resilience, which indicates how exposed some consumers are to plausible increases in interest rates and prices or a small change in their circumstances. For example, a consumer who would struggle to pay their mortgage if it increased by less than £50 a month. 30% of UK adults asked were identified as having low financial resilience, based on their own answers to specific questions
Life events - These are major events happening in the last twelve months, such as divorce, redundancy or the death of a close family member. An event like this happened to 19% of UK adults or their partner
Capability - Defined as very low knowledge of financial matters, or low confidence in managing money – 17% of people were identified as having low capability.
If you have a friend or family member who is a client of ours and you think they may be struggling with any of the issues above, or if you feel you need extra support yourself, please speak to your adviser. There are people within our team who are trained to identify particular customer needs, and address them in the most appropriate way.