When it comes to advising in the later life lending space, one thing you simply can’t do when it comes to potential or existing clients, is judge a book by its cover.
In fact, we have spent a lot of time in our sector bemoaning many in the media who have consistently done this when it comes to clients who take out later life lending products.
The narrative in some quarters still remains what it was 30-plus years ago. That because they are of a certain age they are being taken advantage of, they don’t understand what they are getting into, they are the victims of sharp salespeople who lull them into a false sense of security, and only when it is too late do they realise exactly what has befallen them.
That these are always products of last resort, that they will result in the client losing their home, that they can’t possibly be the most suitable when downsizing exists, etc, etc.
Of course, this is an out-of-date picture painted of a sector which is very heavily regulated and also an out-of-date picture of nearly all clients that will pass through the advisory channel. Not forgetting the products themselves which of course have changed considerably since the very early days of the sector.
However, with Consumer Duty on the horizon, what seems more important than ever is advisers don’t assume anything, not least about their clients, and in fact it is vital they are willing to accept that a customer’s state of mind, approach, understanding, etc may not only be very different to what they anticipated, what they believe to be the norm, but can also change over time.
In that sense, advisers need to present clients with a customer journey that isn’t a one-size fits all, but instead it is individual, bespoke to them, nuanced and flexible and taking into account all manner of characteristics and traits that may be exhibited.
Now, many advisers will counter at this point, and suggest they already do this. The process is tailored to their needs and is as individual as it is possible to be. But, again, I might suggest that in today’s market this isn’t enough.
You might think I’m purely speaking about clients exhibiting signs of vulnerability here – which of course is a big part of what advisers are expected to look out for and tailor their approach accordingly – but it’s not just in this area. For instance, do you as an adviser and firm factor in neuro-diverse clients?
Those who might not just look at the world differently but interact with it in different ways to the norm. Do you understand how this might change the way a client might interact with you and the process, and can you accommodate this?
It’s not just in this area but others too that you might have to shift your thinking and the way you deal with clients. One in 10 people in the UK is dyslexic, for example. That being the case, how might your documentation change or be changed knowing one of your clients is dyslexic?
Again, you can’t simply assume that every client you see is the same, perhaps the same as you. They will not be. Assuming everyone is financially literate is another common trap to fall into, and while I know later life advisers are particularly adept in this area, what if you also add in potential vulnerability or neuro-divergence? How might that change the way you approach the client and deal with them, and ensure they fully understand what is happening and what they are agreeing to?
It is not an easy task but I’m fully confident that later life advisers are in a very strong position to be able to provide a high-quality service to every single client. And that’s the crux of Consumer Duty, the ability to deliver a positive outcome for each and every individual you deal with.
As a start, we need to consider all types of consumer we come into contact with, and how we can continue to deliver excellent advice while ensuring they never feel out of the loop and certainly never feel out of their depth. At Air we’ll continue to work in this area to support you as this is an area on which the focus is only likely to grow.
By the way, I’m presenting on this very topic at the forthcoming LIBF Mortgage Conference on the 19th April, so if you’d like to hear more, please do try and attend.
Stuart Wilson is chairman at Air Club
