Financial Vulnerability Taskforce and Charter

As you may recall, in a recent edition, we highlighted that both our own regulator, the FCA, and your own SRA, had reinforced in the summer just how crucial it was that as professionals, we were aware of just how vitally important it is to both identify, and support vulnerable clients.  The Law Society at the time had written some excellent guidance which we found useful and thought you might find it relevant too.

At Forrester Boyd Wealth Management dealing sensitively and thoroughly with vulnerability has always been paramount. We have stressed this to all our staff, not just our financial planners, who deal with clients. We see this as essential, given the heightened levels of financial vulnerability, as a result of clients having to cope with the ongoing cost of living crisis. This is of course, over and above other common vulnerabilities that you and us both need to understand, such as those affected by bereavement, divorcing clients, elderly clients or perhaps those losing mental capacity.

Since we last wrote on this subject and because we take the subject of vulnerability seriously, we have signed up for a significant charter to demonstrate we are a ‘Safe pair of hands’ for clients that you have identified as vulnerable that need related financial advice. The Charter, which we invite you to read here, sets out the important principles, undertakings and professional obligations that Forrester Boyd Wealth Management will adhere to for these individuals.

There are in effect 9 statements covering all aspects of how we should and will support ‘clients in vulnerable circumstances.’ The last point is highlighted as it is an excellent example of the charter in practice, as very often clients, who you or we have identified as such, will not wish to be labelled as ‘vulnerable clients.’ In many ways we see this aligning perfectly with your own regulatory requirement to always act in a client’s best interests, but to do so, their circumstances need to be fully understood.

The Charter is central to the aims of a newly created professional body, The Financial Vulnerability Taskforce (FVT), which has been set up, in the main, by leading financial services industry figures who are passionate about ensuring vulnerability is dealt with in a far better fashion.  It would be easier for us to use the FVT’s own words that outline their aspirations with which we wholeheartedly support and applaud:

“The Financial Vulnerability Taskforce is a newly created independent professional body covering the Personal Finance, Insurance and wider Financial Services Sector. Its ultimate purpose is to promote greater UNDERSTANDING, encourage appropriate BEHAVIOURS and establish GOOD PRACTICE in respect of consumer vulnerability.”

We sincerely hope that you will take this prompt to read about the FVT, their ambitions for our sector and study the charter which we have committed Forrester Boyd Wealth Management and all our staff to believe in and adhere to. So many individuals and families that you as solicitors deal with and support on a daily basis will be vulnerable for differing reasons. Therefore, we want to ensure you can have true confidence when referring these clients to Forrester Boyd Wealth Management.

If you would like to discuss how we ensure the FVT Charter is central to all we do at Forrester Boyd Wealth Management, the work of the taskforce in more detail or indeed discuss any individual cases where you feel a vulnerable client might need financial advice, please do not hesitate to contact us……

Increasing Joint Applications for Divorce but not enough Financial Remedy Orders

As this excellent article based on research by Woodley’s Solicitors worryingly observes, whilst divorcing couples are taking advantage of the new laws facilitating ‘no fault’ divorces, too often they may not be doing so with the whole picture being taken into account.

There were an incredible 33,324 divorce applications filed in the second quarter of this year. This figure represents the highest on record for a decade, and a large number of these, around 20% were joint applications aiming to take advantage of the new blame free regime. However, there is also perhaps a worrying development in that only just over a quarter, 27% of the 33k plus petitions filed included what is now called a ‘Financial Order’ commonly referred to as a ‘Form A’.

These figures are well down on those of 2021 which strongly suggests to us that many couples might be acting quickly, or indeed, rashly, not realising the importance of protecting their financial position, (even in what was intended as an amicable split.) The Financial Order is vital, as you will of course be aware, in setting out an agreed financial position between both parties. Such a document when established under the expert advice and guidance of a family solicitor would ordinarily include a clean break clause, preventing future come back or complaint from either spouse.

It is a major concern to us at Forrester Boyd Wealth Management that this important document, that sets who is entitled to what by way of property, assets, savings and crucially pensions, is being omitted because couples are opting for what they, perhaps mistakenly believe, to be a cheap and easy route to separation. Doing so, without taking proper legal advice can lead to complications and even greater disputes down the line, which was exactly what both parties no doubt hoped to avoid.

It is why we would ALWAYS advise any of our clients making the huge decision to separate, to do so with qualified legal advice from a specialist family solicitor, safe in the knowledge that we will also be on hand to work closely with that lawyer on the vital financial aspects, particularly pensions, properly set out early in the process with an agreed Financial Remedy. The alternative, which may seem simple and attractive, due to a low headline cost, will so often end up being the most expensive decision in the long run.

The best advice for divorcing couples at a stressful time is to ensure they are separating with a joined up collaborative approach from a family solicitor and qualified and trusted financial planner. This is crucial in our view, with far too many divorces occurring without the true understanding of, or consideration given to pensions. If you wish to discuss meaningful collaboration in support of these vulnerable clients, please contact us ……

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