Case Studies & Best Practices: Financial Advice for Vulnerable Groups

Case Studies: Financial Advice for Vulnerable Groups

This research presents case studies on how organizations in the United Kingdom have successfully provided financial advice to vulnerable individuals. Liverpool Victoria addresses the needs of its vulnerable customers through its team of Vulnerable Customer Champions. Scottish Widows has a trusted friend protocol that allows vulnerable members to seek help from a friend or relative in order to better understand their options and make the right decisions.

We have provided for you other high-level overview reports that are closely related to this subject below;

Liverpool Victoria: Vulnerable Customer Champions

  • Liverpool Victoria (LV=), a leading insurance company in the United Kingdom, provides financial advice to vulnerable groups through its Vulnerable Customer Champions. Once the company suspects or discovers that a client is vulnerable, its Vulnerable Customer Champions intervene and ensure that measures are taken to guide such a customer in the right direction. A specific example of how the company has leveraged its Vulnerable Customer Champions is provided below.
  • The Challenge: In a particular instance, LV=’s Customer Experience Team was concerned about one of their pension scheme member who contacted them repeatedly “to request a lump sum payment from his plan which represented a significant proportion of its overall value.” LV= discovered that this customer was obviously unable to understand or follow the steps required to withdraw a lump sum.
  • The Solution: This member was then flagged as vulnerable and the case was assigned to one of LV=’s Vulnerable Customer Champions. LV= received a call from a third party, claiming to be a carer and advocate for the scheme member. The individual advised that the customer was suffering mental health issues and the family were working on obtaining Power of Attorney. The family had requested that LV= should not pay any further money from the scheme since the member was unable to make such decisions at the time.
  • Throughout that period, the customer contacted LV= several times, continuously appearing confused and distressed about his withdrawal requests. In response, LV= issued the appropriate documents to the customer again. These documents were accompanied by “a bespoke letter highlighting the risks of accessing the money, and urging the member to contact their financial adviser for support.”
  • Also, LV= contacted the servicing financial adviser, flagging the member as one who is experiencing difficulty in accessing his money. The servicing financial adviser was also asked to get in touch with the customer.
  • Success Achieved: A few days later, LV= received the paperwork back. This time, “the instruction had changed, from a one-off lump sum, to an annual income of a much lower amount, which [LV= considered] to be a better outcome for the member.” Through this process, LV= was also contacted by an independent organization that represents vulnerable individuals; this organization now works with that vulnerable member and his family.

Scottish Widows: Trusted Friend Protocol

  • Scottish Widows, a UK-based life insurance and pensions company, supports vulnerable customers through its trusted friend protocol. In delivering financial advice, the company encourages vulnerable customers, such as those who have difficulties in understanding their options, to authorize a trusted friend or relative that can collaborate with the company in helping that customer. A specific example of how the company has leveraged its trusted friend protocol is provided below.
  • The Challenge: In one instance, a customer, known as Mrs. Gray, called the company to find out more about her pension and understand what her options were. The first call handler that spoke with Mrs Gray explained all the retirement options to her; however, she revealed that she was partially deaf and was struggling to hear him properly.
  • The Solution: Aware and concerned that this customer was unable to fully understand her options since she was hearing-impaired, the call handler informed Mrs. Gray that she could seek the assistance of a trusted friend or relative. Scottish Widows’ call handler also informed her that she could authorize that person to obtain further information about her policy and all the options available.
  • Also, a customer intent pack was sent to Mrs. Gray, providing all the information about her options in a written format. After reviewing the customer intent pack, the customer called back two weeks later authorizing her friend to speak on her behalf and get further clarification.
  • The Results: Through their trusted friend protocol, a Scottish Widows call handler provided guidance to their deaf customer’s friend, showing her the relevant forms that needed to be completed in the customer intent pack.
  • This time, Mrs. Gray was able to fill out and sign all the paperwork. She successfully made a “request to have her tax-free cash paid out.”

Best Practices: Financial Advice for Vulnerable Groups

Advisers or financial organizations must create, promote, and embed the culture which gives advisers the ‘power’ to do what is right and take the necessary actions as required by each customer. Additional insights on how advisers can provide financial services to vulnerable groups have been provided below.

Skill, Care, and Diligence of Frontline Staff

  • In a full-time month, an adviser will see 87 clients on average. Of this number, seven will present with addiction issues while another 37 will present with mental health issues. Additionally, each week, at least 40% of advisers will deal with a customer with a limited grasp of the English Language. It is, therefore, imperative to train and create an environment where staff can be empathetic.
  • Advisers must be trained on the following:
    • How to identify and respond (by asking the right questions) to “precious moments” that convey warning signs.
    • How to stop and think in order to “take ownership and consider what response will help to resolve the situation and give the right outcome for the specific customer.”
  • In support of the training points listed directly above, advisers must work towards a one-stop notice. This means that advisers should “minimize the need for customers to re-communicate particular circumstances or characteristics through intelligent and controlled information sharing.”
  • Additionally, it is necessary to create, promote, and embed the culture which gives advisers the ‘power’ to do what’s right and take the necessary actions as required by each customer. This culture empowers advisers to ask important but sensitive or personal questions that will help them make better decisions that cater to the client’s needs.
  • Regarding the above point, organizations must develop and share their own vulnerability policy, which should follow the guidelines set forth by the Financial Conduct Authority (FCA). It should be noted that the FCA guidance is still not set in stone as the organization is still consulting with all stakeholders. A report by the Money Advice Trust recommends that companies should “write a simple policy which explains how a client who discloses sensitive personal data will be treated, and how their information will be used and shared during the process.”
  • Organizations should also ensure they plan for common situations based on existing data, while not overlooking situations that rarely happen but provide equally high-impact events.
  • Leverage technology smartly such that vulnerable customers are guaranteed an equally-good experience while safeguarding their data and privacy rights. The Financial Conduct Authority (FCA) recommends keeping the General Data Protection Regulation (GDPR), and Data Protection Act 2018 (the DPA 2018) in mind, while noting that the Information Commissioner’s Office (ICO) “retains its independence as the regulator responsible for data protection and firms remain accountable for their own compliance with the relevant legislation.”

Leverage Proven Tools and Resources

  • report by the Personal Finance Research Centre of the University of Bristol recommends that organizations and advisers should adapt and improve existing tools that are already in use by financial organizations in the United Kingdom. The recommended tools include Behaviour and talk, Remembering, Understanding, Communicating, and Evaluating (BRUCE); Set-up, Start-off, and Stay-with (SSS); Thank, Explain, eXplicit consent, Ask, Solution (TEXAS); Impact, Duration, Experiences, and Assistance (IDEA); and Breath (to focus), Listen (to understand), Ask (to discover), Keep safe (from harm), and End (with summary) (BLAKE). Each tool is explained below.
  • BRUCE is “is a tool to help advisers identify and support clients who might be at risk of vulnerability or disadvantage due to difficulties with understanding and decision-making.”
    • Consequently, the ‘B’ stands for behavior. It ensures advisers are looking for any tell-tale signs that point to the client’s behavior and speech limitations.
    • The ‘R’ helps advisers answer the question: is the client having issues remembering information?
    • ‘U’ stands for understanding; does the client understand the information provided by the adviser?
    • ‘C’ stands for communication, that is, can the client clearly communicate their thoughts and importantly, their decisions about the situation on hand?
    • ‘E’ stands for evaluation; can the client weigh and compare the different financial options they are presented with?
  • SSS is a tool “provides a way to move from identification to conversation — helping advisers to start a potentially sensitive conversation.”
    • The first ‘S’, set-up, prompts advisers to make sure the environment is right for a healthy conversation to happen. Advisers would be able to deduce if the time and place are right, as well as the people present.
    • The second ‘S’, start-off, recommends using “questions that normalize the situation, which shows the adviser has been paying attention, and which give the client hope.”
    • The last ‘S’, stay-with, recommends that even though conversations around vulnerability are tough, advisers should keep at it; not from the point of pestering the client, but from the perspective of keeping the door open for the conversation at a later date.
  • TEXAS “provides a tool for handling disclosures not only of mental health problems, but a wide range of vulnerable situations.”
    • The ‘T’ allows the adviser to thank the client for sharing sensitive information.
    • ‘E’ ensures the adviser explains to the client why the company needs the information and what it will be used, and who (if) the data will be shared with.
    • ‘X’ stands for explicit, which says the adviser should seek expressly stated consent from the client to get their permission to use the data as explained in the ‘E’ stage.
    • ‘A’ recommends that advisers should ask questions that will help them understand the situation better.
    • ‘S’ stands for solution and encompasses all things that will answer to the client’s need. The solution could be routing the client to an internal expert staff or external organization, or involving a third-party such as the client’s family.
  • IDEA “is a tool to help advisers get the most relevant information from their conversations about a client’s vulnerable situation.”
    • ‘I’ encourages the adviser to ask what the vulnerable situation makes them stop doing regarding their finances or how it affects them generally.
    • The ‘D’ stands for duration. Advisers can talk with the client on how long the vulnerable situation has been in existence.
    • The ‘E’ stands for experience. This part of the tool encourages advisers to examine if the experience is a one-off or a recurring affair. This may determine the type of support the client needs.
    • ‘A’ stands for assistance and recommends that “advisers should consider whether the client has been able to get any care, support or treatment for their condition or situation. This could open up discussions about obtaining relevant medical evidence.”
  • BLAKE “is a tool to help advisers to effectively respond to client disclosures of suicidal thoughts or intentions.”
    • ‘B’ stands for breath and encourages advisers to breath so they can focus their thoughts better after hearing a scary revelation from the client.
    • ‘L’ stands for listening, and it encourages advisers to listen carefully, specifically to assess if there is any imminent danger.
    • ‘A’ stands for ask, and encourages advisers to ask questions that will help them fill gaps in their understanding.
    • ‘K’ stands for keep safe, and encourages advisers to keep the client safe by following established protocols in the company’s vulnerability policy, which may include calling emergency services if there is imminent danger.
    • ‘E’ stands for end, and encourages advisers to end the conversation with a summary of what was discussed as well as the actions both parties agreed on.
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