Financial planning adds immense value to many peoples’ lives, providing valuable insights into their finances to help them make the most of their money.

Indeed, you may well already work with us at Cordiner Wealth and so have first-hand experience of the support we provide to our clients.

But one area you may not have considered where financial planning could help someone is in protecting a vulnerable family member.

Read on to find out what it means for someone to be considered financially vulnerable, and how introducing your vulnerable family member to a financial planner can help protect them and their money.

You may have vulnerable relatives without having realised

The idea of vulnerability has become increasingly important over the past few years, especially from the perspective that not all vulnerabilities are obvious.

However, as a result, this may mean you have a vulnerable family member who’s at risk of financial abuse, without you even having realised.

According to the UK’s regulatory body the Financial Conduct Authority (FCA), a vulnerable customer is defined as:

Someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”.

Of course, this is an extraordinarily broad description, meaning various different factors could contribute to an individual being considered “vulnerable”. This could include:

  • Age
  • Health, including physical injuries, mental health, and disabilities
  • Learning difficulties, low literacy, and trouble communicating
  • Being in care
  • Cultural or language barriers.

With so many characteristics of vulnerability, it may come as no surprise that, in the FCA’s Financial Lives Survey 2020, they found there to be 28 million people with at least one of these traits in October 2020.

It also leaves open the possibility that many people may be temporarily made vulnerable by their personal circumstances.

Indeed, as the FCA’s research study reveals, the number of adults with at least one vulnerable characteristic increased by 3.7 million between March and October 2020 as a result of the financial stresses caused by the Covid-19 pandemic.

Vulnerable customers are at increased risk of scams and financial abuse

Worryingly, vulnerable customers are also the ones at the greatest risk of scams and financial abuse.

Financial abuse can involve having money or property stolen or misused, being defrauded, or being put under pressure to make decisions with money under coercive conditions.

According to London Learning Consortium, financial abuse makes up 20% of all adult abuse in the UK, with 60 – 80% of abuse taking place in the home and 70% being carried out by a family member.

Furthermore, the Financial Lives Survey found that, of individuals approached by a suspected Covid-19 scam, vulnerable people were far more likely to give their money to potential scammers.

12% of those with at least one vulnerable characteristic paid out, compared to just 1% of individuals with no characteristics.

As you can see, these figures go to show that abuse is a pervasive problem, and one that disproportionately affects vulnerable people.

Financial planning can secure and protect your vulnerable family members

With so many potentially financially vulnerable individuals in the UK, it’s possible that you have a family member or someone else close to you who would be considered to have at least one characteristic of vulnerability.

And, with the risk of abuse so prevalent, you may understandably want to help protect them so that they are able to access their money safely without having to worry about falling victim to abuse.

In that case, you may want to consider introducing them to a financial planner, such as us at Cordiner Wealth.

For example, we can help your vulnerable family member to manage their finances, providing support to ensure that their money is suitably organised to support them.

According to the FCA, 57% of adults with low capability over money and finances said that they “felt nervous, overwhelmed or stressed” when speaking to financial service providers.

This may prevent them from finding suitable savings or investment options, simply because they find communicating with providers too difficult.

At Cordiner Wealth, we can help by explaining difficult financial concepts in simple terms so that your vulnerable family member understands what we’re doing and how it can help.

We can also help to create structures that protect money and assets for vulnerable family members, particularly those who need additional support, such as those with learning difficulties or a disability.

In this case, we might suggest creating trusts or putting a Lasting Power of Attorney (LPA) in place so that bad actors can’t access your family member’s money, no matter what they do.

Get in touch

If you’d like to find out how we could help your vulnerable family members today, please do get in touch with us at Cordiner Wealth.

Email or call 0113 262 1242 to find out more.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.