Advisers urged to consider ‘vulnerability’ of older borrowers

Mortgage and equity release advisers have a duty of care to assess the potential vulnerability of later life clients.
The comments were made by TSF Mental capacity assessors founder, Tim Farmer, talking at the National Later Life Adviser Conference.  
In recent years there has been a significant rise in the number of older borrowers seeking mortgages and equity release products. Farmer pointed out that this could be a challenge for many advisers, particularly as their vulnerability may be subject to change over time.  
He says that any assessment should take into account three contributing factors: individual, wider environmental factors, and the activity (or inactivity) of lenders to that vulnerability.  
Farmer adds that advisers have to understand their client fully to ascertain what stage or state they may be at, and how likely this might change in future.  
He says: “Advisers need to get to know their clients and understand their key life stages, because they will impact the advice they give.
“Clients may be okay one day and not they next. They can move from a situation of temporary vulnerability to more permanent vulnerability.”
Using third party assessors can help head off potential difficulties for both adviser and client in the future. It will ensure that there is evidence that clients understand the decisions they are taking and the potential consequences, should this course of action be challenged at a later date.
Farmer says this is an issue remains under FCA review, and the regulator has its own definition of financial vulnerability.  
Advisers at the conference — held at the Madejski Stadium, Reading —   also heard that financial vulnerability can affect those of all ages, and should be an issue they bear in mind when offering lending advice. One of the keynote speakers at the event was former boxer Frank Bruno who discussed his mental health problems.  
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