Beth Yolland-Jones, Clinical Lead at duty of care assessment company Comentis, explains how, not only are we all susceptible to financial vulnerability, but we’re each considerably closer than we might imagine.
A short while ago, I was speaking with a neighbour about my work in the field of financial vulnerability. During that conversation, he expressed an opinion I’ve come across countless times before: that being vulnerable in such a way was something that happened to others. He had savings, a stable home life and a good job. It couldn’t possibly happen to him.
When I replied that we’re all considerably closer than we might think to being vulnerable – specifically, that each of us is only ever two steps away – I think it would be fair to say that my neighbour was rather shocked.
The truth is that vulnerability is a broad spectrum. We can all build up savings, set aside emergency funds and develop our own financial literacy for times of need. But it’s not a trap that only certain people can fall into. It’s a shifting arena that we’re all constantly traversing, avoiding little pitfalls along the way.
So let’s dive into this question of what vulnerability actually entails. How should we try to think of it, and how should finance professionals provide support to their vulnerable clients?
Understanding vulnerability
I think one of the reasons so many people believe they couldn’t possibly be at risk of financial vulnerability is that we misunderstand it on a conceptual level.
The FCA tell us that we could be vulnerable at any time, and while we do tend to take that on board, there’s a part of us that thinks it’ll only apply later in life. What I was trying to get across to my neighbour, when I spoke about the two steps, is that this isn’t necessarily the case. It isn’t something that only applies once old age comes a-knocking.
But what, exactly, are these two steps? And why is it that we could take them at any moment? In essence, I was referring to a circumstance, such as a life or a health event, and our subsequent response. As such, if we were to suffer an event such as a cancer diagnosis or a redundancy, but we managed it well, we would have taken one step, but not the second. It’s when we don’t have the resilience or reserve to combat those difficulties that we take that second step and find ourselves at risk from vulnerability.
Understanding this is vital to understanding vulnerability. Likewise, we need to be aware that vulnerability doesn’t exist in isolation. We don’t have mental health in one silo, physical health in another, our work-life in a third… All it takes is for the balance to tip ever so slightly before one affects the others and we find ourselves in a situation that’s difficult to cope with. Something like a physical illness may keep us from going to work, affecting our mental health, and causing everything
to feel overwhelming. It’s that recognition of the interplay between different factors, and of the boundary not being a neat separation between vulnerable and not, that we need to understand.
How should advisors employ this concept?
In order to provide the support their clients deserve, first and foremost we need finance professionals to understand that vulnerability is nuanced. We’re all juggling plates, any of which could drop at any given time. From there, it’s about humanising the experience of being vulnerable. We can all relate to a time when we’ve felt as if we’re struggling. If any one of us can become vulnerable at any time, what can we do as humans, clinical workers and financial advisors to provide support? How can we respond with empathy?
Some professionals may take a tick-box approach when it comes to checking clients for signs of vulnerability, looking for one of a rigid series of potential indicators. This strategy simply doesn’t work.
What advisors really need is the means to systematically identify signs of vulnerability – to know that they’re getting it right every time – and the only way for that to truly be achieved is for every client to undergo a specialist assessment underpinned by data. Combining clinical expertise with hard data, an online assessment can be easily deployed and removes the bias and subjectivity that would inevitably be a factor with a face-to-face assessment. It also helps the advisor to avoid becoming too focussed on certain trigger-words that a tick-boxing approach might encourage. Only with a specialist and systematic assessment focused on data can advisors ensure that all vulnerability drivers are consistently in scope across an entire client base.
Erasing the divide
In order to make progress on vulnerability, what we ultimately need is to erase the divide that we so often imagine and dispel the idea that it’s a fixed boundary across which only people of a certain age, health or financial status will cross. The reality is that vulnerability is a delicate threshold that shifts throughout our lives. None of us know what’s round the corner. We could all struggle at any given point.
With that in mind, we need to deliver information in ways that are empathetic and are genuinely going to help. A webinar, for instance, may not always be terribly useful. Speak openly with your clients and find ways to manage their unique difficulties. Likewise, having robust systems in place, so that vulnerable clients can be identified, and support can be provided as early as possible, will go a long way.
I also think it’s important that we start to reframe financial vulnerability as financial wellbeing. This is about taking a more holistic, person-centred approach, so that we are seeing all of a client’s strengths, rather than just the negatives. Instead of asking what’s missing, we need to consider how to maximise what resilience is already there. Ultimately, it’s time we stared to normalise discussions around financial wellbeing, making it less stigmatised and less specific to that person’s perceived inability or vulnerability.
Above all else, we need to recognise that vulnerability is a human experience, perhaps even reflecting on our own circumstances and on how close we might have come without even realising. Because whether we realise it or not, we’re all considerably closer to vulnerability than we think.
