Financial advisers are changing their attitudes on vulnerable clients, particularly on mental health challenges, according to a new report.

The study found that nearly two out of five advisers (39%) say they now consider clients’ mental health when providing advice.

However, just 17% of advisers believe the financial services sector provides enough support on vulnerable clients and they want to see more help.

Many advisers say the pandemic and economic crisis have changed client behaviour, with 46% of advisers seeing clients taking more money from their savings and pensions, the study by consultants AKG found.

Nearly half of advisers (47%) say they would welcome more support from providers on preparing for the forthcoming Consumer Duty and vulnerable customer requirements.

Some 55% of advisers say they would value support on identifying and supporting vulnerable customers and 50% would like training to help identify and service vulnerable customers.
 
AKG’s paper: 'Protecting the vulnerable: Navigating the evolving regulatory landscape in a post-pandemic world', shows advisers are now focused on the vulnerable customer issue. The paper was  sponsored by Fidelity, RBC Brewin Dolphin, and Standard Life.
 
AKG says that financial education and closing the advice gap will be key to tackling vulnerability.

Research for the paper found just 17% of consumers believe the financial services market provides adequate resources to support decision-making when customers are vulnerable while a third admit to making poor financial decisions in the past two years.

In terms of vulnerable customer framework preparedness for advisers:
• 66% are well prepared 
• 31% could do better  
• 3% are unprepared 

In terms of Consumer Duty requirements preparedness the report found:
• 52% are well prepared 
• 37% could do better 
• 11% are unprepared 
 
Matt Ward, communications director at AKG, said: “Providing valuable support to vulnerable customers is a crucial challenge for financial services to tackle and given the impact of the pandemic and cost of living crisis it is evident that approaches will need to evolve as more people are potentially identified as being vulnerable from a financial standpoint.

“Ensuring more customers can achieve positive financial outcomes should be on the mind of everyone with Consumer Duty in the air, but we’ve got to consider how this is done inside and outside of the advice bubble of those who are able to/not able to access professional support.”
 
• Opinium carried out the consumer research for AKG via an online survey in February with a research sample of 2000 UK adults. Adviser research was quantitative and qualitative. The quantitative adviser research carried out on AKG’s behalf by Pureprofile. The field work was in the form of an online survey carried out in February with a research sample of 100 advisers. For the qualitative adviser research a series of interviews was carried out with 22 individuals representing 19 advice firms using telephone or teleconferencing. Interviews took place in  December and early January. Interviews were facilitated on AKG’s behalf by Frank Fletcher of Widewater Consulting.
 
• The report can be viewed here: https://www.akg.co.uk/downloads.