Vulnerable clients and introductions
How to recognise vulnerability on a mortgage case, when to make an introduction and when to wait, how consent and third parties work, and what Equity & General needs to know.
How to recognise vulnerability on a mortgage case, when to make an introduction and when to wait, how consent and third parties work, and what Equity & General needs to know.
The FCA's guidance on the fair treatment of vulnerable customers describes four drivers of vulnerability: health, life events, resilience and capability. A client may be affected by one or several, for a short time or for good.
A physical or mental condition, or a disability, that affects how the client manages their finances or a conversation about them.
Bereavement, separation, redundancy, a new caring role or a serious diagnosis in the family.
Little room in the budget for a shock, high debts or irregular income.
Low confidence with money or with digital channels, or limited English.
Several of the situations that lead to an introduction are life events from that list. A client who has inherited after a parent's death, or who is remortgaging after a separation, is facing a planning question and a life event at the same time.
A client may not tell you they are vulnerable. Look for what the case and the conversation show.
Ask the client how you can make things easier for them. Record what they say, with their agreement, so that nobody in your firm has to ask again.
An introduction to a financial planner can help a client in a vulnerable situation. A bereaved client may have pensions to claim and an estate to settle. A client after a separation may have a pension share to invest. The question is timing.
when the client raises the question themselves, or when a decision with a deadline needs advice, such as a pension sharing order or an inherited pension.
when the client is coping with the mortgage but has little room for anything else. Tell them the offer stands and ask when to check back.
when the client is in acute distress or you doubt they can make the decision. Return to it later, or speak to your compliance lead.
Wording you can use“There may be some pension and savings questions to look at after everything that has happened. That is outside what I advise on. When you are ready, I can ask a planner at Equity & General to call you. Would you like me to check back with you in a month or two?”
Consent to an introduction is only valid if the client understands what they are agreeing to and is free to say no. Explain it in plain words: who the details go to, what goes and what happens next. Ask the client to tell you in their own words what they have agreed to.
If you doubt that a client has the capacity to make the decision, do not take consent. The Mental Capacity Act sets out a test for capacity in England and Wales, and Scotland has its own legislation. Your firm does not assess capacity. If doubt remains, speak to your compliance lead, and involve an attorney if the client has one.
Clients may want someone with them. Ask the client, record the answer and follow it.
They can support the client in meetings. They cannot consent for the client. Speak to the client alone at some point to confirm their wishes.
They can act for the client within the terms of the power. Check that the power is registered and see a copy before acting on the attorney's instructions.
They act within the terms of the court order. See a copy of the order.
Where a family member stands to gain from a decision, such as a gift or a loan to a child, watch for pressure. If you see signs of it, pause, speak to the client alone and record what you saw.
With the client's consent, tell Equity & General about any adjustments the client has asked for. Keep it to what the planner needs in order to help.
Health information is special category data. Pass it on only with the client's explicit consent, and only as much as the planner needs. A note that the client has asked for shorter meetings can be enough without passing on the diagnosis behind it.
A client whose partner has died may need to transfer the mortgage into their sole name, claim on life cover and deal with the lender's bereavement team, all while the estate is being settled. Handle the mortgage first and at the client's pace.
A death can bring pension questions: death benefits to claim, a survivor's pension to set up or an inherited pension fund to decide about. Some have time limits. Tell the client that these questions exist and that a planner can help with them, and let the client choose when. Record that you told them.
Do not pass details of the person who died to anyone without the client's consent, and check whether the client is the executor before discussing the estate with them.
On a separation, each person is a client with their own interests. If you acted for both on the original mortgage, take advice from your compliance lead on whether you can act for either now, and keep their information apart.
Pensions can be among the largest assets in a financial settlement. A pension sharing order, or offsetting pension value against the home, involves pension advice for each party. Offer each client their own introduction, and never pass one party's details or position to the planner advising the other.
Stay in touch with the client on the mortgage in the usual way. If the client tells you that something about the planner's contact is not working for them, such as the time of calls, pass that on.
If the client tells you they feel pressured, or do not understand what is being recommended, take it seriously. Tell Equity & General through your named contact and record that you did.
The line between mortgage and protection advice and pensions and investment advice, with the client questions that fall either side of it.
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What appointed representative firms should check in their network agreement before making introductions to an outside adviser.
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Roles, the first ninety days, training your mortgage advisers, and what to measure once the partnership is running.
Read itYour firm keeps the mortgage and protection advice. Equity & General gives the pension, investment and estate planning advice, and a named partnership manager sets the arrangement up with you.