17Dec

Large numbers of over 55s feel vulnerable when making financial decisions, but many say they welcome the support of an adviser 

Research by equity release lender More2Life has revealed that many older people feel uncomfortable making financial decisions. However, the study also shows that many over 55s very much welcome the support of a financial adviser.

Research agency Opinionmatters surveyed 1,400 homeowners aged 55 and over on behalf of the lender, and 30% of respondents said they felt “vulnerable” to some extent when making a financial decision. 32% of women and 28% of men said they felt vulnerable.

40% of those surveyed agreed that vulnerabilities increased with age.

When the homeowners were asked how they would react if their adviser offered them support, with the adviser having assumed that they were vulnerable before doing so, 74% of respondents said they would be comfortable with this. However, 8% went as far as to say that they would be upset that their adviser had assumed they were vulnerable when they were not.

Some of the 74% who said they were comfortable with being offered support also gave some caveats to their response, with 37% of this 74% saying they would question their adviser as to why they believed support was required, and 21% of the 74% saying that they would only welcome the adviser’s assistance if it didn’t slow down the application process.

The survey also sought the views of around 600 equity release advisers. 82% of the advisers who responded agreed with the FCA’s plans to introduce a duty of care for firms to protect the interests of vulnerable individuals. 81% called on the regulator to provide more resources to assist them in identifying vulnerable clients and in responding to their needs.

84% of the advisers said identifying vulnerable clients was one of their biggest priorities and 94% said it was very important to have an understanding of issues surrounding vulnerability. However, only 12% of adviser respondents believed it was easy to identify these clients.
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Those surveyed were equity release advisers, so it isn’t surprising that 52% said their clients were of “advanced age”. 42% said they had clients with significant financial worries, while 37% said that their clients had experienced life-changing events which had contributed to their vulnerability.

64% of the advisers reported that their clients were keen to have family members accompanying them to assist with the advice process. This represents a significant increase from the equivalent figure of 36% in the 2018 survey – it was 48% in 2019.

Dave Harris, CEO of More2Life, commented:

“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.

“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.”

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