The role of communication in supporting vulnerable clients

What does 'financial vulnerability' mean, and how can you use communication to support your clients who may be having difficulties?

date_range 03 November 2020

With Covid-19 challenging our daily living and creating an unprecedented level of financial uncertainty, now more than ever the focus is on New Zealanders’ financial vulnerability.

Earlier this year, the Financial Markets Authority provided guidelines for financial providers on how to identify and deal with customers’ vulnerability – best-practice principles that also apply to financial advisers.

Here’s how timely, quality communication can play an important role in supporting your clients through these challenging times.

Understanding the meaning of ‘financial vulnerability’

According to the FMA’s information sheet ‘Customer vulnerability – our expectations for providers’, “a vulnerable consumer is one who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”

In other words, vulnerability can arise at any point in the customer journey, stemming from a variety of personal circumstances or specific events, including:

  • Redundancy or sudden financial hardship
  • Serious or chronic health issues
  • Age-related issues
  • Physical or mental disabilities
  • Traumatic events like bereavement or natural disasters
  • Communication difficulties.

Covid-19 has exposed New Zealanders’ financial vulnerability with unprecedented clarity. As the Commission for Financial Capability (CFFC) found during Alert Level 4 in early 2020, 34 per cent of households surveyed were in difficulty and 40 per cent were at risk of tipping into hardship.

But recent events have also showed that quality financial advice can provide New Zealanders with the confidence they need to make well-informed decisions and face the challenges ahead. In October 2020, an independent survey commissioned by Financial Advice NZ revealed that Kiwis who have a financial adviser in their corner feel significantly better prepared for their future than their unadvised peers.

 

Vulnerability can arise at any point in the customer journey.

It's all about building a trusted relationship.

So, how can communication play an important role in helping advisers support vulnerable clients?

Stay top of mind

It’s important to let your clients know that they can use you as a soundboard, especially those facing vulnerability. You’re there at all times for their questions and concerns, no matter how big or small.

Of course, you may not know that a client is vulnerable in the first place. Sending out regular eNewsletters to your clients can be a good way to keep an open line of communication and stay top of their minds, so that when the need arises, they’ll know who to get in touch with.

Help your clients understand the jargon

Even for the most educated clients financial products can often be complicated to understand. There’s a lot of jargon involved, and the short and long-term implications may not be immediately evident or known.

Again, client eNewsletters can be a great way to share your expertise and insights, unprompted. At FINERGY, we specialise in creating eNewsletter content designed to engage and inspire your clients in a clear, informative way. No jargon, no waffle – just quality information, the way it should be. And compliance-approved, too.

Build trust

Sometimes, your clients may not be aware of their vulnerability or they may be reluctant to express it. They need to feel that they can entrust you with their most personal details, and that’s why building trust is key.

Of course, in-person meetings play a key role in building rapport, and so do regular client communications. By using a warm, accessible tone in your client comms, you’ll support a trusted relationship that prioritises good client outcomes.

Get in touch with the team at FINERGY

Now more than ever, financial advisers have a crucial role in New Zealanders’ journey to financial wellbeing. And as we’ve seen, keeping a consistent line of communication open with your clients is key to ensuring that your clients feel valued and supported.

Whether you need compliance-approved blog content to use in your existing eNewsletters or are looking for 360-degree client communications to keep your business top of mind, FINERGY can help you. Please email info@finergy.co.nz to learn more about our services.