Are you a Vulnerable Client?

A person caring for a vulnerable client

Being a Vulnerable Person Could Make You a Target for Finance Scams – Be Aware!

Earlier this year the FCA launched guidance for Financial Advisors relating to the fair treatment of vulnerable clients.  On the FCA website it states that their research showed that “27.7 million adults in the UK now have characteristics of vulnerability such as poor health, experiencing negative life events, low financial resilience or low capability”.  

We Use Intelliflo

At Interface, we use a very intuitive client management system from Intelliflo, and it has developed our system so that we have to record our comments on each client’s vulnerability. I think that this is a wonderful idea but of course, it highlights the problem: Are you a vulnerable client? 

It may be easy to identify if a client has Alzheimer’s or dementia, or any other easily recognised condition or to identify illnesses or serious injury that may cause loss of capacity.  Hopefully, in these cases the client has had the foresight to complete and register Lasting Powers of Attorneys (both of them), so that their Attorney can be consulted. 

Life Events That Cloud Judgement

The death of a partner or close relation may cloud our judgement.  So too may financial stress, advancing age, or simply failing sight or hearing.

Perhaps we all are vulnerable at some points during our lives? I have examples of clients who I have known for a long time and who I think of as very solid people who would never do anything silly with their money.  However, there are cases where clients do not take heed.  As an example, in one case a client kept sending money to what turned out to be an internet scam and it was only discovered when he made the mistake of paying money from his joint account and his wife noticed the mistake.  It was, unfortunately, too late for the £30,000 that had already gone overseas.

In another case, a well-suited gentleman who’d been met “down the pub” in similar circumstances persuaded an otherwise careful lady to part with £35,000 because of the promise of an ‘exceptional’ return. 

There was a third case, where a so-called adviser sent a courier on a motorbike on a 200-mile round trip to collect a man’s signature on the same day because a financial offer had to be settled urgently. That day £70,000 went to spurious non-regulated investments offshore. The client and his wife came to me for help, they both said, “I don’t know why I did it because I have always been so careful with money!”

I could go on and give you many more worrying examples. I find it so frustrating when I have taken so much care to ensure that my client’s money is invested wisely and with great care and then they go and blow it on a whim!  There are just so many scams out there, online and offline, and they’re becoming more and more sophisticated, it’s actually very easy to fall victim.  I’ve had plenty of quite literally brilliantly clever clients who’ve still found themselves at the mercy of scammers.

Take a Moment to Think

So back to my original question: Are you a vulnerable client? Please don’t be upset if I ask you that question, it is important for both of us to understand your circumstances — I am only following FCA rules after all.  Please be extra-careful with financial offers that sound too good to be true – often that’s the warning, they are quite simply, too good to be true.  Always ask questions, do the sensible thing and go to your Financial Advisor to check anything you might be tempted to embark on first!

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