There has been a lot written about vulnerability; how we assess clients for vulnerability, how we train our people to spot it and deal with it, how we record this. I would like to take a step back and ask you to indulge my personal view from observations and experience over the last 18 months, having “retired” from full-time work.
With more time on my hands, aside of the odd client commission, I was able to offer some support to an elderly acquaintance, who had a wife going into fulltime care for multiple issues including cognitive impairment. What became apparent very quickly was that this couple were cash rich and had never sought any financial support. Planning for future needs and changing circumstances had not been on the radar, they just believed they were building up an inheritance for their only son. There was a perception that financial advice was “not for them” and you must ask yourself why? The only thing they had in place was a joint will, leaving everything to one another and then to their son once they had both passed.
If someone had only told them 10 years ago (in their early 70’s), if not before, the importance of Lasting Powers of Attorneys, possible gifting, possible care home planning, investing rather than simply saving into the bank (they hadn’t taken up their ISA’s allowances and even had non-interest bearing bank accounts with significant sums in), then they wouldn’t be where we are today;
That’s great but where were you when they really needed the advice 10 years ago?
The wife is now burning through money to pay for care home fees in excess of £5k p.m. with the prospect of not reaching the c£23k of cash until after Christmas 2025, when we can apply to the local Council for support. My concern is that the husband, who is older, will become unable to live in the jointly owned home for much longer as his health is declining and he’ll get trapped in the same position as her but with the value of house included in the asset calculation. I’m not confident the son will end up inheriting much from the estate.
Now, I expect there are a lot of readers screaming at the page calling out lots of advice planning ideas and next steps. That’s great but where were you when they really needed the advice 10 years ago? A well-considered financial plan could have given them security and eased some of the agony we have had over the last 18 months;
- The LPA for each of them took almost a year to put in place (OPG – Office of Public Guardian lost her paperwork twice!!)
- As the OPG eventually released a “paper” version of the LPA and it couldn’t be activated online (the husband had given up his broadband some years ago because “things were getting too complex” and he doesn’t own a smart phone so that is no help anyway). We had to physically take the only copy to each bank and building society. One bank which only had a pop-up version in the local town would only accept a scanned copy. I was able to do this, neither the husband nor the son have scanning capability at home! As you can imagine I did mention Consumer Duty and Vulnerability several times!! (please do drop me a line if you want to know more about this, to use as a case study with your teams!!)
- The application for Attendance Allowance for the wife took me over an hour to complete with everything in front of me (how older people manage this 30 plus page form on their own – I have no idea!). Over Covid, the husband had been caring for her but didn’t claim for that because the paperwork was online and he had no facility to complete online!
- All the time that the LPA was not in place the care home were racking up the bill to be paid and the husband was getting increasingly anxious about the bill. He gave them my name and number as joint attorney in waiting and the care home would ring weekly for an update. TBF they were very understanding and interestingly as my relationship developed with the team in Finance, they revealed this happens all the time. They told me, it’s not uncommon for those in care with no one on the “outside” supporting them, to accumulate huge bills as the legal process to access funds for those with cognitive impairment is very slow (court of protection orders required).
Now I expect if you have read on, you might assume this is my rant about the state of social care in this country and I’m now going to bang on about successive governments not facing the elephant in the room. I’m not. I’m going to use the above to return the title Vulnerability and the real advice gap.
Why is it people think “financial advice” is not for them? Is it the concerns about cost? Or is it that doesn’t seem to be available to them or simply, they haven’t had the benefits explained to them? Have we got several generations of people who don’t know enough about financial wellbeing and the need to plan?
I suspect that like the couple in my story above, most people really don’t understand the different between saving and investment, and the opportunities for planning around investments to support future circumstances.
Barclays this month reported 13m UK adults were holding £430bn in cash deposits, with the figures based on savers who already held more than six months income in cash savings (FT Adviser 11th Sept). This supports the finding in the July 2024 Lang Cat “The Advice Gap” survey which suggest only 9% of consumers are paying for financial advice. Now I’m a realist and take onboard several similar comments made by advisers in the Lang Cat survey, that it is economically unviable and too big a regulatory risk to support lots of clients at the lower end of the investment. However, my couple were prime example of a potential client who had in excess of £300,000 to invest (aside of the property and more than adequate regular pension incomes to meet monthly needs). I’m not expecting advisers to do all the work I have, but signposting and regular meetings would have meant they would be a better place than they are now. They could have been supported by a trusted adviser many years ago. Given what the care home told me, the Barclays research and the consumer data in the Lang Cat survey, there are millions of these people.
I guess I’m suggesting that Wealth and Advice firms actively seek out vulnerable clients “in waiting” with a genuine desire to do the right thing for them. Put your service in front of them and see if they can be persuaded to act ahead of vulnerability and secure a more stable future for themselves.
I’ve decided to try and do something and I’ve applied to go on the speaker list for Wiltshire’s WI (Women’s Institute) providing talks to WIs about “Financial Wellbeing – the basics of Investment”. I’ve also reached out to a couple of Financial Wellbeing Charities to see if I can help support awareness. To be clear, I’m not going to be offering any advice, just explaining the difference between saving and investment plus the must have’s you need to have in place i.e. a will, LPA and how to access financial advice. I’ll stay agnostic – FCA website, PIMFA and SOLLA membership lists etc.
I expect some readers will still be screaming out at this page, I’m naïve, unrealistic about the commercial and regulatory considerations for firms, misguided or worse … (!) But I can’t help but feel that there is more the industry could be doing to provide a much-needed service. Yes of course, it requires some hard work (what job doesn’t), patience and that desire, as alluded to above, “to do the right thing”. But for every new convert to financial planning, there will be the word of mouth referral. Vulnerability and the advice gap could be good for your business.
Julia Kirkland JRK Consulting (Linked In Julia Kirkland, Chartered FCSI | LinkedIn) Contact details; email juliakirkland@btinternet.com Tel 07743 726766
