On RTE Radio long ago, Frankie Byrne used to say “this may not be your problem now but it could be some day”. Many of you know people who might be ‘vulnerable’.
There are four key drivers of vulnerability:
- Health – physical disability, severe or long term illness, hearing or visual impairments, poor mental health, low mental capacity, or cognitive disabilities.
- Life events – caring responsibilities, bereavement, income shock, relationship breakdown, non-standard requirements (ex-offenders, care leavers, refugees).
- Resilience – low or erratic income, over indebtedness, low savings, low emotional resilience, lack of support structure.
- Capability – low knowledge or confidence in managing financial matters, poor literacy or numeracy skills, low English language skills, poor or non-existent digital skills, learning impairments.
We, at Adelphi Financial Brokers assess whether any of our clients is vulnerable and we have processes in place to protect and assist those clients who are vulnerable.
These processes are more detailed than simply assessing a client’s age, health, or recent life events. Age is not included, as this itself is not an indicator of vulnerability, although we do automatically require a client who is over a certain age, to be deemed vulnerable and offered the option of a third party being present at meetings.
The consequences of vulnerability are:
- Heightened stress levels, increasing time pressures and increasing pre-occupation which limits your ability to manage.
- Your processing power and ability decreases due to competing pressures of:
- lack of perspective and not understanding the broader implications;
- unable to make comparisons or see the “bigger picture”
- Change of attitudes towards taking risks – becoming more reckless or careless at moments of stress.
In turn, these consequences make vulnerable clients more likely to experience:
- Financial exclusion
- Difficulty in accessing services
- Partial exclusion
- Disengagement from the market
- Scams
- Over-indebtedness
- Exposure to mis-selling
- Inability to manage a product or service
- Purchasing inappropriate products or services