- Nearly a third (30%) of homeowners aged 55 and over have felt vulnerable when making a financial decision
- 81% of advisers say they need more practical guidance on how to spot the signs and deal with vulnerable clients
With the Financial Conduct Authorities (FCA) consultation on the fair treatment of vulnerable customers set to close on Wednesday 30th September, more2life – one of the UK’s top equity release lenders - has published a report that looks into adviser and consumer attitudes to this topic.
MAJORITY OF CLIENTS WANT SUPPORT:When more2life asked homeowners aged 55 and over how they would react if their adviser offered them support because they thought they were vulnerable, three-quarters (74%) said they would be comfortable with this.
However, even though the majority of older homeowners would welcome additional support in this area, close to a fifth (19%) said they do not need any help and 21% said they would only welcome this assistance if it did not slow down the application process. What’s more, more than a quarter (27%) said they would question why their adviser thought they, or a family member, are vulnerable, while just under one in ten (8%) would be ‘upset’ at being regarded as vulnerable when they are not.
more2life’s research also revealed that close to a third (30%) of homeowners over the age of 55 have felt vulnerable when making a financial decision. Moreover, the likelihood of vulnerability is thought to increase as people age, with two in five (40%) homeowners agreeing that, as people get older, they are more likely to be vulnerable. Feeling vulnerable was also more common among women over 55 (32%) than men (28%).
FCA GUIDANCE ON VULNERABLITY WELCOMED BY ADVISERS:As part of the FCA’s wider ambitions to support vulnerable customers, they have also proposed introducing a duty of care for those advisers helping these customers (i.e. a legal obligation for advisers to act in the best interest of their clients and exercise reasonable care and skill when providing a product or service). Today’s research suggest that the majority (82%) of advisers support this, although many believe that this should already be part of a firm's approach.
BUT MORE NEEDS TO BE DONE:With advisers keen to provide enhanced support for their customers, they are looking to lenders and the rest of the industry for support. The vast majority (81%) believing there is a need for greater education and more resources to provide them with practical guidance on how to spot the signs and deal with vulnerable clients. In addition, 73% felt that there was more than the industry could do to make equity release literature clearer and easier to understand.
Today’s research has been taken from more2life’s new report, ‘Who are you calling vulnerable?’, which explores consumer and adviser sentiment on how the equity release market is supporting vulnerable customers. A full copy of the report can be found here.
Dave Harris, CEO, more2life, commented: “Vulnerability is a tricky topic for advisers and lenders as while we are committed to supporting people who need additional help, clients may very well not identify themselves as being vulnerable. So the challenge becomes helping them make the right financial choices for both the short and the long term while at the same time encouraging them to realise they may be vulnerable and that this is entirely okay.
“Today’s research suggests that three-quarters of older homeowners would welcome support if they were vulnerable which should act as a reassurance to advisers as they have these conversations with their clients. That said, there is still a disconnect between believing that vulnerable people need more support and being vulnerable themselves so advisers are keen for more resources and tools to help with these tricky conversations.
“As a responsible lender, we are committed to making sure our customers are making the right decisions for the right reasons and supporting advisers in recognising vulnerability. It is for this reason that we strongly welcome the FCA’s guidance on vulnerability to ensure the best outcomes for customers in the equity release market.”
The ‘Who are you calling vulnerable?’ Report was based on three tranches of research on almost 600 equity release advisers which took place in October 2018, July 2019 and March 2020. This is supplemented by consumer research on 1,400 over-55s homeowners carried out by Opinionmatters in August/September 2020. Back to newsroom