Intermediaries, lenders and technology platforms need to be in sync
Intermediaries, lenders and technology platforms need to be in sync and connected in order to ensure that vulnerabilities are detected early, according to Jonathan Barrett, co-founder and chief executive of Comentis.
Barrett went on to say that from the borrower’s point of view, the journey is very disconnected, and more needs to be done to help connect the dots.
How big an issue is vulnerability?
Robert Sinclair, chief executive at AMI, has said that 90% of later life customers can be considered vulnerable, so it is important that they are probably supported.
Read more: Where to start on assessing vulnerability in the later life space
“One hundred per cent (100%) of older borrowers will become vulnerable at some point, whether this is through bereavement, divorce, loneliness, or mental issues,” said Stuart Wilson, chief executive of AiR Group.
Wilson added that, in addition, it is important to bear in mind that clients can be temporarily vulnerable.
“For example, a UTI in an older person will affect their mental capacity and it will appear as if they have a much more severe health problem than they do,” he said. “A UTI can be cured with antibiotics, whereas dementia, which presents similar issues from the outset, is a long-term health problem.”
Vulnerability is not black or white - it could also come in the form of a temporary upset, sometimes occurring when the person is dealing with a problem over the space of a few months before coming to terms with it.
Read more: How to support vulnerable mortgage clients
Barrett went on to say that people develop coping mechanisms to help them hide when their mental capacity has weakened, and therefore detecting these issues becomes much harder.
“It can be difficult for family members to detect early onset dementia, so it can be near impossible for an adviser to realise this,” he said.
How to detect vulnerability
Barrett believes that detecting vulnerability is not a tick box exercise - it needs to be done by getting to know the customer. The nature of the questions asked is extremely important, as it can help the adviser develop a clearer picture of their client.
“You do not know what you do not know,” said Wilson. “There needs to be a better base level of knowledge from advisers to detect vulnerability.”
“In adviser communities there is not a joined-up process - this needs to be brought in,” he added. “There has been some progress in this regard over the last few years, but it is not enough.”
As there are very few lenders within the equity release market, currently nine, Barrett explained that this provides an opportunity for the industry to work closer with one another in order to improve the support available. Barrett also believes that creating consistency within this area of the market is very important.
In order to improve standards, Wilson said that AiR Group and Comentis will be holding a number of workshops together with the intention to help teach the industry about vulnerability.
According to Wilson, there is a real appetite among advisers to learn more about their customers, as well as to help detect vulnerability and improve the market.
“Advisers are passionate about what they do, and they want to support their clients to the best of their ability. Connecting the dots and getting everyone on the same page is key,” he concluded.
