New research has found that almost a third of all over 55s (30%) have felt vulnerable when making financial decisions.
The survey also found that three quarters of those spoken to would welcome the support of a financial advisor who was aware of their vulnerability.
However, 19% said they would be upset if they were regarded as vulnerable when they were not.
More practical guidance
The survey was conducted by equity release lender More2Life and it also found that 81% of financial advisors felt they needed more practical guidance on how to spot the signs and then deal with vulnerable clients.
Mindful that a Financial Conduct Authority (FCA) consultation on fair treatment of vulnerable customers is about to close, the firm has produced a report on consumer and advisor attitudes to the topic.
Chief executive Dave Harris said: “Vulnerability is a tricky topic for advisers and lenders as while we are committed to supporting people who need additional help, clients may very well not identify themselves as being vulnerable.
“So the challenge becomes helping them make the right financial choices for both the short and the long term while at the same time encouraging them to realise they may be vulnerable and that this is entirely okay.”
He pointed out that many older clients are reluctant to see themselves as vulnerable and in need of extra support, making it hard for advisors to strike the right tone during a consultation.
The More2Life research looked into the FCA proposals and agreed that vulnerability is likely to increase as consumers age with 40% o those spoken to agreeing.
The feeling of vulnerability was found to be more common among women (32%) than men (28%).
Duty of care
The FCA’s consultation has suggested introducing a duty of care – a legal obligation – for advisers to act in the best interest of their clients and exercise reasonable care and skill when providing a product or service.
Commenting on the consultation Mr Harris said: “We strongly welcome the FCA’s guidance on vulnerability to ensure the best outcomes for customers in the equity release market.
“Today’s research suggests that three-quarters of older homeowners would welcome support if they were vulnerable which should act as a reassurance to advisers as they have these conversations with their clients.
That said, there is still a disconnect between believing that vulnerable people need more support and being vulnerable themselves so advisers are keen for more resources and tools to help with these tricky conversations.
“As a responsible lender, we are committed to making sure our customers are making the right decisions for the right reasons and supporting advisers in recognising vulnerability.
It is for this reason that we strongly welcome the FCA’s guidance on vulnerability to ensure the best outcomes for customers in the equity release market.”