Have you considered a Charter for dealing with vulnerable clients?

We make no apologies for revisiting the subject of vulnerability, a subject we at FB Wealth Management take extremely seriously, and of course one that both our regulators do as well.

Legal Services Board Research 2022

It was just over 2 years ago that your oversight regulator, in its research paper into how the law firms identified and supported clients in vulnerable circumstances, labelled much of the professions as ‘cold and clinical’ and urged the frontline regulators to address how firms improved in this arena. The LSB went as far as to suggest that most consumers who need to approach a lawyer, will be, by definition, vulnerable.

As a result, the SRA issued its own guidance on vulnerability and the Law Society also published some excellent material as well.

How can you support the needs of vulnerable clients?

We were prompted to return to this important subject by an excellent piece, written for the Law Society, by two prominent solicitors, Heledd Wynn and Fiona Heald ahead of their session with the above title at the Law Society Private Client Conference this month.

The article counters a popular contention that vulnerability only impacts those who are injured and unwell and outlines 4 main issues that might be encountered by consumers requiring legal advice.

• Capacity and decision making – Does the client have the mental capacity to understand your advice and make an informed decision?
• Undue influence and coercion – Vulnerable clients might be more susceptible to undue influence from family members, caregivers, or others in authority.
• Communication barriers and access to legal services – Are there physical or financial constraints to seeking legal advice and are your communications in plain language and jargon-free?
• Safeguarding against financial exploitation – This is hugely significant for vulnerable clients, particularly in matters related to wills, trusts, attorneyship and property.

Third party due diligence

It is the fourth point around safeguarding your clients from potential financial exploitation that leads us onto how vital it is that your firm has undertaken thorough due diligence on any third parties your lawyers need to work with where there is a financial aspect or complementary financial planning required. FB Wealth are a trusted third party with a highly experienced and qualified team but when dealing with clients in vulnerable circumstances you MUST be convinced of that and able to reassure your client as to why this is the case.

The Financial Vulnerability Taskforce Charter

How we, as financial planners, deal with vulnerability is covered rigorously by the FCA’s Consumer Duty, and at FB Wealth Management, as we have mentioned previously were early adopters of the Consumer Duty Alliance’s professional standards and their Financial Vulnerability Taskforce Charter.

The Consumer Duty Alliance is a non-profit organisation established to help financial planning firms embrace and implement Consumer Duty which has a huge emphasis on how we identify, support and advise clients in vulnerable circumstances.

However, in the latter part of 2023, assisted by SIFA Professional, who FB Wealth Management are also a proud member of, the CDA adapted the charter so it was appropriate for and could be adopted by any professional firm working, not only in UK personal finance but equally in the legal and accountancy sectors.

The Consumer Duty Alliance resources

We would encourage you to look at the charter in the link above and hope that you might adopt it. This will demonstrate to the Solicitors Regulation Authority, your existing clients and importantly potential new clients researching your firm and services, how serious your firm is when it comes to vulnerability and advising clients in vulnerable circumstances.

The CDA also has some valuable resources and guides which can be downloaded for free here. The guides are well-researched and written and cover areas that straddle legal and financial where clients will often feel vulnerable such as divorce, LPAs and sudden wealth.

FB Wealth Management has fully embraced the charter and what it means for all our staff, financial planning, and support teams, and how they identify, communicate and work with vulnerable clients and we would love to discuss the reassurance it will offer to clients you refer to us.