Vulnerable Clients 3. Resilience

In February 2021, the Financial Conduct Authority issued guidance to financial firms called “Fair Treatment of Vulnerable Clients”.  It also set out the key drivers of vulnerability:

1. Health
2. Life Events
3. Resilience
4. Capability

Whilst we have always worked and offered services to consider all clients potential vulnerabilities.  Now that the FCA has documented the same, we are endeavouring to make continued improvements for staff awareness, identifying vulnerable client positions and offer guidance on the same to ensure the best outcomes for you on financial wellbeing.

Resilience – How do we help clients with a low ability to withstand financial or emotional shocks

There are many factors that directly or indirectly affect both our financial and emotional resilience and the FCA has set out some key resilience factors:

• Inadequate (outgoings exceed income) or erratic income
• Over-indebtedness
• Low savings
• Low emotional resilience

We regular talk to our team about spotting signals that a client has low resilience.  Financial resilience for inadequate income, large debts and low savings are easy to spot given they are facts i.e., the numbers tell us, but we will always check what the cause may be.  It is a question of trying to understand why a client has large debts or low savings.  We always try to establish why?  It may be habitual, it may be overspending due to depression, it may simply be a ‘victim of circumstance’ e.g., loss of job, furlough pay, relationship breakdown (two homes cost more than one), it may be no good habits of saving regularly have been established.

The issue of low emotional resilience is a little trickier for us to deal with.  We clearly will try and empathise i.e., ‘put ourselves in your shoes’ but all situations are different.  Your emotions may be low as you may have ‘carried’ certain things with you for all of your life.  It may only be short term low emotional states.

The two directors of this firm always have a ‘handover’ session for each client where we not only discuss the technical aspects of a client’s financial position, we also looks at related causes for low resilience and take these into account when helping clients.

We are not registered debt counsellors and we are not psychologists or psychiatrists, but we will try to understand or at least be aware of both internal and external influences that may affect your emotional wellbeing.

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