Overview
This policy outlines how Humboldt Financial UK Limited aims to identify and treat clients and prospective clients who may be considered vulnerable due to factors such as age, disability, or other personal circumstances.
Vulnerability can manifest in many ways, and it is crucial that these individuals are treated appropriately, fairly, and consistently. At Humboldt Financial, we are committed to ensuring that vulnerable clients receive the support they need. This will be done by:
- Being flexible in our approach to client communications
- Showing empathy for specific needs or concerns they may have
We will ensure that all vulnerable clients are treated as individuals and their unique needs are respected.
Definition of a Vulnerable Client
The Financial Conduct Authority (FCA) defines a vulnerable client 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.”
All clients face varying degrees of risk in becoming vulnerable, whether temporarily, sporadically, or on a more permanent basis. This risk can be heightened by factors linked to four key drivers:
- Health: Includes physical disabilities, long-term illnesses, hearing or visual impairments, mental health conditions, addiction, or cognitive disabilities.
- Life Events: Major life changes such as retirement, bereavement, job loss, relationship breakdowns, domestic abuse, and caring responsibilities.
- Resilience: Factors like financial instability, low income, erratic income, over-indebtedness, low savings, or low emotional resilience.
- Capability: Lack of knowledge or confidence in managing finances, low literacy, poor numeracy skills, language barriers, lack of digital skills, and limited access to support.
It’s important to note that not all clients exhibiting signs of vulnerability will be vulnerable. We also recognize that some individuals may not wish to be labelled as “vulnerable,” and we respect their preferences.
What Are the Types of Vulnerability?
Vulnerability can arise from a variety of factors, and individuals may experience vulnerability on a permanent, temporary, or sporadic basis. Some common types of vulnerability include:
- Health-related Vulnerabilities: Physical disabilities, severe or long-term illness, mental health conditions, addiction, and cognitive impairments.
- Life Events: Major changes in circumstances like divorce, redundancy, bereavement, or unexpected illness.
- Financial Vulnerability: Low or erratic income, over-indebtedness, low savings, or unstable employment.
- Capability Issues: Low literacy or numeracy skills, poor English language skills, lack of financial knowledge or digital capabilities.
- Age-related Vulnerabilities: Elderly clients, especially those over 80, may face cognitive, sensory, or mobility issues. Young clients may also lack experience in handling financial decisions.
- Social Vulnerabilities: Domestic abuse (including economic control), addiction, caregiving responsibilities, and lack of support from family or external services.
Individuals affected by any of these factors may struggle to make informed decisions, fully understand advice, or assess the risks and costs of any actions or recommendations.
Identifying a Vulnerable Client
While the presence of one or more vulnerability factors may indicate that a client is vulnerable, it is not always definitive. We approach each client as an individual and assess their personal circumstances to determine their specific needs.
At Humboldt Financial UK Limited, we ensure that:
- Strong records are created and retained for every client.
- We seek consent to obtain, record, and retain sensitive personal data.
- Anti-money laundering checks are conducted for the client and their representatives when necessary.
If a client is identified as vulnerable, we will handle their case with particular care and follow the processes outlined below under Dealing with Vulnerable Clients.
Dealing with Vulnerable Clients
We will take steps to ensure that vulnerable clients understand the advice being given and feel supported throughout the process. If we identify a client as vulnerable, we will:
- Communication Flexibility: Adapt our communication methods to suit the client’s needs. This may include providing information in larger print or offering audio or video formats if necessary.
- Additional Support: Encourage clients to bring a trusted third party, such as a family member or carer, to meetings for support. If we suspect undue influence from a third party, we will pause the process until we can meet with the client independently.
- Meeting Adjustments: Where appropriate, we will offer to meet clients outside standard office hours or at their preferred location to accommodate physical or logistical constraints.
- Communication Preferences: Clients will have a choice of communication methods, including face-to-face meetings, phone calls, or written correspondence.
For clients with specific needs:
- Physical Disabilities: Staff can attend client premises or a location of their choice if needed. We can also provide large print information and assist with hearing impairments, such as offering sign language interpreters.
- English Language Barriers: Clients whose first language is not English may invite an interpreter at their cost, or we will help arrange one where appropriate.
- Digital Literacy Challenges: If a client is not comfortable with digital communication, we will send all correspondence by post and ensure that we provide a non-digital method of communication.
All steps taken will ensure the client is comfortable and that their needs are fully addressed.