Brokers need to be aware, says head of intermediaries
The fear of being in debt can often cause anxiety, but when it becomes a real burden it can lead to depression, physical illness or worse.
And with the ever-deepening cost-of-living crisis impacting on households, the concern is that an increasing number of people - and borrowers - will be ill-equipped to deal with the financial fall out.
Research from the Financial Conduct Authority (FCA) shows that more than 27 million adults in the UK are considered to have some form of vulnerability, such as poor health or insufficient financial resources.
In many respects, brokers are on the front line, which is why clients should feel they are able to approach mortgage experts without fear of being penalized, according to Jonathan Stinton (pictured), head of intermediary relationships at Coventry Building Society.
Speaking to Mortgage Introducer, Stinton cited the FCA’s research, particularly the disconcertingly large number of people who are deemed vulnerable.
“That’s a huge part of the market that needs extra support and extra guidance,” he said. “Mortgages and financial services can be complex, and we certainly can’t have massive swathes of the population not getting the advice that they feel is important to them.
“Brokers need to be switched on and alive to the fact that there is such a huge proportion of the population (that’s affected). Those people shouldn’t be excluded from getting the advice or getting the products and services they need.”
Supporting vulnerable clients
In light of the economic crisis, the Coventry Building Society has issued a 14-page guide for intermediaries, titled ‘Supporting Clients with Vulnerabilities’.
Much of the work focuses on identifying vulnerabilities, including verbal clues that are often a red flag that all is not well with a customer, in addition to the steps intermediaries can take to help, even down to offering information in Braille.
Stinton, however, recognized that the guide was only a first step.
“Firms can train up their staff to deal with vulnerable customers because it can’t just be down to the individual broker,” he said. “It’s a much bigger problem that can’t be solved just with a wonderful customer hub or a guide. We need to continue talking about it.”
Brokers should also take into account that a person’s vulnerability can manifest itself in a myriad of ways and that it may not be related to a more obvious physical disability or illness.
“It can cover people who have had a loss in the family, a change in their circumstances, or a breakdown in a relationship. It could be a short-term vulnerability, but it could put them in a position where they’re not really thinking clearly about what’s best for them, not only now, but going forward six, 12 or 24 months down the line.
“We need to be made aware of the vulnerability, and that’s where brokers can really start to come into play to identify some of these things, or even just bring it to our attention before it’s too late. Clients need to be able to feel confident that they can have those conversations with their lenders and not be penalised - that’s the important part.”
The impact of branch closures
A topic currently doing the rounds and which may indirectly affect the wellbeing of customers is branch closures, and this week’s announcement by HSBC that it will be doing away with 114 branches in the coming months will be a major disappointment to people who prefer over-the-counter transactions and the immediacy of face-to-face human contact, especially the elderly and those who are technology shy.
Asked if banks should be more concerned about the social repercussions of branch closures, Stinton said: “Clearly, commercial decisions need to be made around profitability and the viability of branches, (but) it should also be in their thinking whenever they’re making those decisions. Trying to get through a contact centre can be frustrating; you can’t always articulate verbally what you want to say, and sometimes you need that face-to-face reassurance.”
Crucially, Stinton expressed concern not just about customers, but intermediaries, pointing out that they were also a group at risk.
“We need to be very mindful that brokers are going to be falling into that vulnerable camp as well,” he said. “It hasn’t been an easy ride for them over the last six months, but you could probably go back to any point in time and say the same thing.”
Have you experienced a rise in the number of vulnerable customers? Mortgage Introducer would like to hear from you. Let us know in the comments section below.