Financial Planning And Vulnerability

In this article, I want to look at vulnerability which is a situation that can affect anyone irrespective of their age or their financial situation.

According to Just, a financial services provider in the retirement income space, there are four key drivers of vulnerability and these are:

The Financial Conduct Authority (FCA) has developed the following definition to guide work in this area:

“A vulnerable consumer 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.”

Vulnerability occurs in a variety of ways which may be permanent, temporary, or even sporadic, dependent on its nature. In many circumstances the individual may not recognise themselves as ‘vulnerable’.

The FCA use a ‘spectrum of vulnerability’ concept to help illustrate the risk of vulnerability and this demonstrates that being vulnerable is not a fixed state but instead is transient.

Clients at the greatest risk of harm are likely to require more, or different, support than others. Where a firm can identify a client in vulnerable circumstances and support them effectively, the risk of harm is reduced.

How We Help

We are often asked to help clients with their financial planning following a particular life event and often this may come from a professional introduction or a referral from an existing client.

For example, divorce can be a particularly traumatic event and we are asked by a family solicitor to be involved both before and after the final settlement.

Following a bereavement and subsequent inheritance, we can be involved in helping a client understand what that means to their own financial situation.

Increasingly, we are asked to help elderly relatives manage their wealth and to provide advice around estate planning. Often the referral comes from the children who may be acting as attorneys under a Power of Attorney for their parents.

Mangu Wealth Management’s Approach

As a small boutique financial planning and wealth management firm, we are uniquely positioned to help our clients who may be vulnerable or who are going through a phase in their lives which increases the risk of vulnerability. By being relatively small, we have a much more personal relationship with our clients and feel that we are better able to recognise signs of vulnerability than, say, larger firms who may be more transaction-based or who have a high turn-over of staff.

By putting lifestyle financial planning at the heart of what we do, we take away the pressure of having to explain complex financial products or investments allowing the client to fully understand their financial position first. We can then introduce financial products or investments at a time suitable for the client.

We take a patient approach preferring to hold more frequent and shorter meetings if necessary. Where appropriate, we often ask clients who are in a vulnerable position to bring a trusted friend or family member to the meeting.

We believe in working collaboratively with other trusted professionals and will look to arrange meetings to include Accountants and Solicitors if required.

We will tailor our communications to the needs of our clients simplifying complex financial products to ensure our clients and their family can fully understand our recommendations.

Summary

Vulnerability can happen to all of us at different stages of our lives irrespective of our age or our wealth. Having a trusted adviser on hand who understands you, your financial position and your goals can help to ensure that the financial decisions you make are in line with your goals and your best interests.

Contact Us

If you would like us to review your financial position, please do contact us using the button below.