Prioritising your client’s needs: a guide to recognising financial vulnerability

Recognising vulnerabilities

How do you protect your clients? By putting your clients first. This means actively listening, considering all their available options, and tailoring solutions to their unique circumstances.

According to the Financial Conduct Authority (FCA), a financially vulnerable person is “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”.

At Royal London Equity Release, we embed regulatory guidance into our day-to-day operations and prioritise client wellbeing. We are committed to helping people plan for their financial future by providing fair value and getting your clients the outcomes they deserve.

In this article, we will bring you up to speed on the latest information around financial vulnerability in the UK, as well as ways to recognise and help those in tough situations.

What vulnerabilities should you look out for?

A person could be vulnerable for many different reasons, and whether they are considered vulnerable is not stagnant- it could change across several points of their journey of releasing equity. That’s why it’s important to understand vulnerability, so you can recognise it effectively and assist your clients in the way that best meets their needs.

These vulnerabilities can include :

Life events

Imagine a client approaching you after losing their spouse, anxious about their financial future. This is a key example of how life events can trigger vulnerability, requiring you to offer extra sensitivity and guidance.

Other life events include:

Going through a divorce - Over 27,000 divorce applications were made between January and March of 2024.

Dealing with unexpected care duties - According to the Centre for Aging Better, over 2.7 million people over the age of 50 labelled themselves as unpaid carers in the latest census.

These major life events can happen suddenly. In this situation, it’s important to consider a client’s intentions. They could be looking to find a solution as quickly as possible, but you need to make sure that they fully understand what equity release means for them and the impacts it could have in the future.

Health issues

Your clients could be dealing with health issues which may be sudden and long-term and may prefer to video call you rather than meet in person because of their health issues. They might be looking at releasing equity to help make their life easier. For example, they might want to renovate their home to make it more accessible.

Aim to keep the process as simple as possible by considering their situation and putting your client’s long-term needs first. In some cases, suggesting different specialised organisations could be important as they might be better equipped to support them.

Financial resilience

Clients begin the equity release process with varying levels of financial understanding. It might be that they find complicated financial situations stressful and as an adviser, it is your responsibility to make the process simple and easy to understand.

Whether they come to you directly, or you’re able to recognise it, make the process easier by meeting them in a way that is accessible to them. For example, you could provide them with extra material that explains important information in a simple way, eliminating any industry-specific language.

Taking the steps to acknowledge the difficulty of situations like this and making it simpler is essential to getting your clients the outcome they need.

Support from us

Being aware of these potential vulnerabilities helps you to ensure you’re offering clients the best support you can.

At Royal London Equity Release, we’ll help you if you feel your client is in a vulnerable position, with our excellent Adviser Support, Business Development and Customer Service Teams available to answer any questions you and your clients may have.

Get in contact with us today!