L AT E R L I F E L E N D I NG Opinion
A
systematic challenge is emerging within the financial advice industry, as further reports come to light about cracks in the advice process, leading to vulnerable customers slipping through the net and potentially resulting in serious consequences. This year, the Financial Conduct Authority (FCA) reported that only 40% of vulnerable customers – who may be facing emotional, financial, health-related or other concerning challenges – disclose their personal circumstances to their financial adviser, and even fewer are encouraged to share them. As a result, these customers report negative experiences within the industry, as opposed to non-vulnerable customers whose experiences of the market are significantly higher.
Early identification The growing gap in how firms identify
and support vulnerable customers is a rising concern, as vulnerability still gets treated as an exception, as opposed to being a core component to the customer process and experience. Predominant factors contributing to this blind spot appear to be around systems for monitoring vulnerable segments, cross-company data sharing of vulnerability identifiers, misalignment of company policies against the FCA’s Consumer Duty and vulnerability guidance, inadequate consideration of vulnerability in equity release products, and insufficient training and tools for advisers, among others. Further disparity has come from Schroders Adviser Pulse Survey this year, which revealed that an astonishing 95% of financial advisers believe that less than 25% of their customer base is vulnerable. While our internal data aligns much closer with the broader reality of the Equity Release Council’s (ERC) reported industry average, it’s evident
MARK GREGORY is CEO and founder of Equity Release Group
that a proactive and continuous approach to identifying vulnerability throughout the customer journey is required.
Refining and improving This is a primary focus for us at Equity Release Group. Our latest data identified 46% of our customers as being vulnerable – a statistic we don’t shy away from.