Concerns about older family members, work, how your financial commitments are going to be met, or simply just feeling anxious, the normal everyday “little things” may feel twice as big due to the current situation we find ourselves in with Covid-19. With this in mind I started to consider some of my clients, and how they are feeling in these unprecedented times?
The FCA - The Financial Conduct Authority (FCA) defines vulnerable consumers as ‘A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.’
Who may be classed as vulnerable? A person recently widowed or divorced and now living alone. Someone with underlying health issues either permanent or temporary. A person with a physical vulnerability due to a serious accident left with an impairment that may or may not improve. It may be a person with dementia, anxiety or depression. Vulnerability is evident at different times because of life events that happen.
Consider the mental capacity of the person, their ability to make a decision. You can lack mental capacity and be unable to make a particular decision at the time it needs to be made. For example someone can lack the ability to make a decision about financial issues but still retain the capacity for more straight forward day to day decisions. This can be the case with illnesses such as dementia, a learning or physical disability. Mental capacity can fluctuate.
The Mental Capacity Act (MCA) protects individuals who may lack the mental capacity to make their own decisions about their care and treatment. It applies to individuals aged 16 and over. The principles included in the Mental Capacity Act are:
Every adult has the right to make their own decisions if they have the capacity to do so. You must assume a person has capacity unless proved otherwise;
Support should be given to help them make their own decisions;
People have the right to make decisions that others might think are unwise
Any decisions or any act made on behalf of someone who lacks capacity must be in their best interests;
Any decisions or act made on behalf of someone who lacks capacity should be the least restrictive option possible.
A ‘person must be assumed to have capacity unless it is established that they lack capacity', loss of capacity can be temporary or partial and may fluctuate. It is wrong for someone to say that a person lacks capacity. A person should be described as lacking capacity to make a particular decision at a particular time.
As a financial advisory business, how do we approach this area to help achieve the right outcome for our clients?
Our Financial Planning Consultants have the knowledge and skills to interact with potentially vulnerable clients to ensure they are not treated unfairly. We have provided additional training and education for our advisers around this very important area.
Consideration is given to whether someone else is able to offer support, eg a close family member, but we are also mindful of potential conflicts of interest.
We offer a choice on how information is provided. Vulnerable or older consumers may not use websites or email or indeed have anyone to provide support.
Written communications are followed up with a phone call to check it has been received, read and understood to ensure the content was clear and answer any questions. A detailed letter or email is of little benefit if they do not or cannot understand it.
Our clients’ vulnerability is assessed on an on-going basis as part of our advice process. A client may not be vulnerable today but that is not to say they won’t be tomorrow, or in the future.
To discuss any of the information within this article please contact one of our financial planning team on 0808 144 5575 or email help@armstrongwatson.co.uk.
