One of the biggest challenges the advice profession faces is the taboo of vulnerability, according to Stuart Dodson, managing director at The Openwork Partnership.
Speaking at the Pimfa Vulnerability Summit, Dodson discussed how the industry needed to change its perception of vulnerability and instead see it as an opportunity to connect customers with even better outcomes.
He said: “If we look at this as a real opportunity to connect customers with even better outcomes than we can ordinarily generate through the way that we engage, that will move us on to a new chapter.
"It's overcoming that mental perception that comes with vulnerability from an adviser and an organisation's perspective. So let's just think about vulnerability differently. It's not a poor thing to talk about. It's not a bad thing to raise.
"You're actually trying to do the best thing for each individual client, and the best thing you can always do is tailor your approach to everybody that you speak to.”
Dodson was joined by Sarah Owen-James, chief risk officer at Rathbones and Richard Flynn, managing director at Charles Schwab.
Owen-James discussed how Rathbones found the more it engaged with charities and organisations linked to certain types of vulnerability characteristics, it helped the firm become more confident in dealing with vulnerable clients.
“A few years ago, we were very happy that we hit 5 per cent of clients having vulnerable characteristics. We thought we're actually making some progress, and we can understand that some of our clients are different, but that caused us to raise questions to ourselves - is 5 per cent enough? Should we be trying harder? And what are we learning from this?
“And so each year, the number goes up. It's not because our clients have changed, though. We've got a bit more confident talking about it," she explained.
Generational wealth transfer
Dodson noted the need for organisations to prepare themselves for the wealth transfer that is going to happen in the next few years .
“We're going to have a whole new swathe of customers who will have different characteristics than the ones that have traditionally held the wealth. We need to prepare ourselves as an industry for that change.
“We're also going to have a far younger demographic who have wealth in their hands. Their needs and wants will be very different. A lot of them will still have mortgages to clear down, debts to pay, as well as thinking about longer term financial planning.
“Suddenly they're going to find themselves having very little to a lot in a very short space of time. And whilst that might sound really positive and encouraging on one hand, it can also push them into a very different mental state.
"This is where we as an industry can congregate [...] to make sure that we continue to share best practice, take the learnings from across the whole of the industry and challenge ourselves to improve the way that we engage with new clients,” he explained.
