This February saw Tenet Compliance Services and Comentis take to the floor for a deep dive into the vulnerability landscape and key trends facing advisers in the year ahead.
The FCA now estimates as many as one in two adults are at risk of financial vulnerability – a staggering 27.7 million UK adults – so the issue is clearly not going away anytime soon. Dealing with vulnerable clients is nothing new for most advisers but defining and identifying who is vulnerable remains a pressing challenge, one further complicated by the wide-reaching impact of the pandemic.
Joined by over 40 Tenet Compliance Services clients, Nick Watson from Tenet Compliance Services, and Tim Farmer and Jonathan Barrett from Comentis, sat down for a fireside chat to get to grips with the key issues faced by advisers, the challenges around vulnerability and the new tech solutions shaking up the landscape.
The regulator’s position on vulnerability
Kicking off the discussion, Nick Watson, Regulatory Consultant at Tenet Compliance Services, provided an overview of the FCA’s position on vulnerability. He detailed the regulator’s current guidelines, what it sees as the key drivers of vulnerability, such as health, life events, resilience, and capacity, and highlighted its expectations for advisers going forward.
In particular, Nick underlined some key actions for advisers. This included the ability to understand the needs of their target market, ensuring staff have the right skills to recognise and respond to the needs of vulnerable customers, and having the means to respond to customer needs across product design, customer service provision and communications. Finally, he spoke of the need for monitoring and assessing advisers to ensure they are meeting and responding to the needs of vulnerable customers and making improvements where this isn’t happening.
Identifying vulnerable clients and finding solutions
Following this, Tim Farmer, Co-Founder and Clinical Director at Comentis, looked at how advisers can identify vulnerability in a client and some practical solutions for then dealing with it. Tim opened by explaining the difference between resilience and capacity, two of the more complex key drivers of vulnerability. He then went on to explore why advisers often miss vulnerability traits in clients, highlighting issues such as cognitive bias, as well as the spectrum of unique vulnerabilities to look for – from easy to spot to well-hidden traits.
Drawing upon the example of a client grieving, Tim also highlighted a number of practical next steps that advisers can take in responding to a client identified as vulnerable.
Comentis and technology as a solution
Closing the session, Jonathan Barrett, Co-founder and CEO at Comentis, spoke about the company’s Financial Vulnerability Cognitive Assessment solution, which is available to directly authorised advisers in partnership with Tenet. He explained how it allows advisers to proactively identify vulnerable clients and apply interventions in a timely and effective manner.
Acknowledging the added burden of responsibility that the FCA is putting on advisers around vulnerability, Jonathan described how Comentis employs a clinical approach to vulnerability, with the aim of injecting some black and white certainty into a still grey and nuanced issue. He showed how tech can also help with the recording of interventions and outcomes with vulnerable clients, as well as future proofing firms against regulatory reporting requirements.
Watch the full webinar on demand: