A best-practice guide for client vulnerability: practical tips from Comentis’ Jonathan Barrett

Identifying and supporting vulnerable clients is easier said than done, says Jonathan Barrett, CEO of Comentis . In this analysis, Jonathan explains how identification can often be a reactive process; highly subjective and inconsistently deployed, with endless opportunity for bias to affect our judgement. Even for trained clinical experts, identifying someone at risk of a more cognitive vulnerability can be far from easy. Below, Jonathan lightens the load and shares five best practice tips for advisers around vulnerability. 

5 top tips for advisers when it comes to vulnerability:

1) Look for the triggers: The FCA has identified four key drivers – or triggers – that may result in a client experiencing vulnerable circumstances. These are health events, life events, capability, and resilience. There’s a tendency to see these as fixed, but the reality is that no two people will have exactly the same combination. In any case, determining whether one – or indeed more – of these triggers are present should be an advisor’s first port of call when assessing a client for signs of vulnerability.

 
 

            2) Identify the causative nexus: Once a potential trigger has been identified, understanding the concept of the causative nexus is fundamental to determining how best to support that client. Ultimately, this hinges on the idea that it isn’t a circumstance or trigger that makes someone vulnerable. Instead, it’s their unique emotional, physical, or psychological response.  If we consider an instance of bereavement, someone who loses a life partner or close family member is likely to suffer a significant emotional impact, affecting their mood and consequently their ability to engage and concentrate. By comparison, if someone loses a distant family member, who they perhaps weren’t particularly close to, the emotional impact may be less severe. Put simply, the causative nexus is the reason one person is affected by a certain situation while another is not. A good rule of thumb is that the greater the causative nexus, the greater the extent of the vulnerability. If an advisor understands the impact of the circumstance on the individual, they can then use this information to identify how best they should offer support.

            3) Assess every client: In order for this process to work, it has to be consistent. That means every client has to be assessed in the exact same way by the advisor. For instance, it isn’t enough to assume that if a client is wealthy, they can’t be at risk. Vulnerability is complex, and anyone can be susceptible. With that in mind, the first thing to get right is ensuring that advisors are assessing every client for the same signs of vulnerability.

            4) Tailor your approach for each client: Not all vulnerabilities can be responded to in the same way. For instance, a client who is struggling with their memory as a result of dementia may require more in the way of written material than someone who is going through a divorce or moving home. As part of our Comentis Vulnerability Support Framework, we have developed a Vulnerability Quadrant to help determine the support a vulnerable client might need. This tool encourages advisors to consider whether the client needs immediate or long-term support, and whether it should be internal or external. For instance, immediate-internal support may involve allowing scheduling a longer meeting with a client the advisor knows will require additional time to process information. On the other hand, long-term-external support may involve keeping a client’s attorney regularly updated on your dealings, to ensure their best interests are being met. In short, the advisor will need to consider the specific struggles the client is grappling with, and then try to determine what personalised support would benefit them most.

             
             

            5) Record even if clients are not vulnerable: It’s not just about recording if someone is vulnerable. In fact, in order to compile the most comprehensive records, advisors should also keep thorough records of clients who they have recorded as not being vulnerable too. This is essential and something we see missed time and time again. And of course, any vulnerabilities that are identified, as well as any actions or interventions that are taken to provide support, should be comprehensively recorded too in a way that can be recovered and acted upon at a later date. 

            With this best-practice guide, advisors should be well-equipped to bring the process of identifying, supporting, and reporting into their firm’s processes. There are plenty of tools and resources available to help determine how to support clients that have been identified as vulnerable. Comentis’ Vulnerability Support Framework can be found here.

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