More2life’s bi-annual report into vulnerability suggests that advisers are becoming increasingly adept at spotting the challenges customers face.
This research on over 300 advisers which builds on insights gathered in previous reports suggests that 30% of advisers have seen clients in the last 12 months that they considered to be vulnerable – up from 15% in 2021.
This increase appears to be driven by the reduction in advisers claiming clients have no signs of vulnerability which has dropped from 20% (2021) to 12% in (2023) as well as an increase in those who believe 80% of clients they support face this challenge – 10% (2021) to 17% (2023).
While recent economic factors will have had an impact on client vulnerability, the research recognises the work by advisers over the last year to better interpret what creates a vulnerable customer, particularly with Consumer Duty regulation changes looming.
Given the current headlines around rising inflation, more2life says it comes as no surprise that almost one in three advisers (31%) said the most common type of vulnerability they saw was those financially impacted by the cost-of-living crisis.
Drilling down into the impact of the cost-of-living crisis, more2life found that 24% of advisers have found that clients were more financially stressed than before and 23% said those that they are speaking to have more clear needs and fewer aspirations.
Retirement incomes were being stretched with 15% saying clients were more likely to need to boost their income and 16% said they were more open to discussing options such as equity release.
That said, the primary reasons advisers identified customers as being vulnerable have remained consistent pre and post pandemic. 43% of people are looking for support with financial challenges that are not related to the cost-of-living crisis such as an interest-only mortgage while others cite customers being of an advanced age (42%).
Ben Waugh, managing director of more2life, said: “The need to identify and support vulnerable customers has been a focus for the later life lending industry for some time and the upcoming Consumer Duty deadline has made this even more important. Today’s research suggests that advisers are becoming increasingly adept at identifying customers who need additional support and time to find the right options for their individual circumstances.
“While financial pressure from the cost-of-living crisis has been identified as a stressor for some, other challenges such worries around the need to repay interest-only mortgages, advanced age and dealing with a lifechanging event have remained consistent. The additional time and resources firms in this market have devoted to supporting these customers will pay dividends and consistent work to boost their understanding is vital.
“As a lender, more2life is committed to working closely with the advisers it supports to help customers find the right outcomes for their individual situations. Whether it is sharing knowledge such as this report or via training sessions or simply providing tailored support to help an individual case move smoothly through the process, we are keen to work closely with partners.”