Posted by Dave Seager, consulting adviser to Legal Futures Associate SIFA Professional
Seager: Clients can have low confidence and knowledge when dealing with legal matters
Identifying and supporting clients who are vulnerable or in vulnerable circumstances is exceptionally important and therefore has for some time been a clear focus of our regulator, the Financial Conduct Authority (FCA), and of course your own, the Solicitors Regulation Authority (SRA).
Within the SIFA Professional membership and the wider financial planning community, how we look after such clients is something we have taken seriously for many years. Every quality financial planning firm will ensure that all planners and support staff are fully conversant with their firm’s policy in this arena.
The SRA too, in 2022, issued its own guidance to help you meet the needs of vulnerable clients but I wanted to offer some further assistance by highlighting an excellent resource recently published.
Specialist retirement and later life provider, Just, has produced an extremely well-thought-through and focused paper, entitled Vulnerability Matters, which has been prompted by the FCA’s new concept of the spectrum of vulnerability.
The concept is that, logically, vulnerability is seldom a fixed state for a client and they can move up or down the spectrum as their circumstances or outside influences change. I thoroughly recommend that you take some time to read it and share it with colleagues – particularly your compliance officer for legal practice.
In the meantime, I wanted to highlight a few sections I felt relevant to you and to legal services.
Vulnerability drivers and characteristics
The main drivers for vulnerability are identified as health, life events, resilience and capability.
Characteristics of health can of course be physical or mental. For life events, there are two that jump out in the legal world, which are bereavement and relationship breakdown.
Resilience might be characteristics more often seen in our day-to-day working, such as debt, low savings, or variable income.
However, capability will be of true relevance to solicitors, as it could be poor literacy or digital skills, for example, but it will frequently be low knowledge or confidence in dealing with or understanding legal terminology or processes.
The SRA as well as the Law Society have suggested the same.
Spotting the signs and tools to use
You will be pleased in this section to see how often a financial planner is prompted to ask whether the client has a power of attorney in place. Certainly, true financial planners will usually seek to underpin our financial plans with lasting powers of attorney, but this section of the Just paper offers a selection of simple tools professionals might use.
IDEA: When a client’s health might be influencing or hindering decisions, the IDEA tool is an easy for-step prompt for the one giving the advice – Impact, Duration, Experience, Assistance.
For example, what is hard and what impact is this having for you? How long has this been an issue (the duration)? How often is this occurring, have you experienced it previously? Are you receiving any assistance for this and what help is available?
TEXAS: This tool is fundamental as it covers when your client shares sensitive information and how you gain their permission to record it.
T is to make sure you thank them for sharing and E is making sure you explain how this information will be used and how it will assist you to support them properly. X is a reminder to gain explicit consent to record the shared information. A is to ensure you ask is there is any help they are getting and anything you can do. S is to ensure you then signpost other professionals (perhaps us) or organisations that may be useful for further support.
Interestingly the SRA itself uses signposting in its December 2024 client guidance on vulnerability.
BRUCE: This is a valuable tool to embed into your firm’s daily processes for dealing with clients in vulnerable circumstances and is relevant where clients are having difficulty making decisions.
Watch for Behaviours that suggest a client is struggling to make a decision. Remember to offer to go over things again, perhaps put them in writing or involve a preferred financial planning partner if finances are the issue.
Continually check their Understanding and ensure you have the best medium/s for Communication – is there a better way to relay the information? ‘Evaluate’ reminds you to check the client is happy at each stage and again if there is another family member, friends or professional they would like involved.
Summary
Whilst Vulnerability Matters was inspired by FCA rules and guidance, to ensure all customers are treated fairly, there seem to be obvious parallels with the SRA’s own guidance, the SRA principles and, particularly, always acting in your clients’ best interests.
I hope you find it useful and that some of the tools highlighted will resonate for your own law firm and how your team identify and support vulnerable clients or those who find themselves temporarily in vulnerable circumstances.
It seems clear that the rule 2.1 in the firm code of conduct is very relevant here, namely you must have “effective governance structures, arrangements, systems and controls in place” – in this instance to ensure that clients in vulnerable circumstances are identified and well supported by all staff at all times.
Leave a Comment