Advisers are reviewing vulnerability policies

Key Partnerships has revealed that IFAs and brokers are enhancing protection for older customers during the coronavirus crisis.

The research undertaken on almost 250 brokers and IFAs who refer equity release customers to Key Partnerships found that while 29% of companies were confident that their vulnerability policies were robust, some had decided to step them up in the wake of the coronavirus pandemic.

34% of mortgage intermediaries and 33% of wealth managers have reviewed or increased the checks they make on older customers to ensure they are not vulnerable. The Financial Conduct Authority defines a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”

The research also found that 26% of mortgage advisers and 22% of wealth managers are treating all customers during the coronavirus crisis as potentially vulnerable. In addition, 11% of those surveyed said that people who wanted to use equity release for ‘immediate needs’ during the crisis were under pressure and more likely to be vulnerable.

Key Partnerships research found the advice industry has adapted well and will continue to adapt after the immediate crisis is over and may they face increased interest from customers.

33% of advisers say concerns about property prices are driving more clients to contact them while 29% say clients having more time on their hands means inquiries have increased. The rise in inquiries is not translating into business – 56% of advisers say clients are reluctant to commit to major decisions currently.

Jason Ruse, business development director at Key Partnerships said: “Advisers have proved to be resilient and adaptable throughout the crisis despite the challenges of changing working practices and the financial impact on businesses. Vulnerability was a hot topic before the crisis hit and it is good to see that this remains at the forefront of people’s minds and we reviewed our vulnerability policy for added due diligence in the current times.

“While not all older customers are vulnerable, they are an age group which is more likely to be vulnerable and self-isolation as well as the impact of the coronavirus on pensions and savings is likely to have seen more people considering their options. The focus on ensuring vulnerability is addressed is particularly important and the numbers of firms which have taken action or reviewed practices to ensure they are supporting clients underlines how important the issue is.

“At Key Partnerships, we know how important customers are and work hard with our intermediary partners to ensure that their valued clients make smart sustainable choices – even at difficult times like these. Advice should focus on the long-term impact of any decision to release money and may mean recommending customers do not proceed.”

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