CoMentis

Sep 5, 2022

Use of technology to support vulnerable clients is a natural progression for many firms — but they know the human touch still matters Shutterstock / PopTika Spotting clients in vulnerable circumstances is an important aspect of an adviser’s commitment to both their client base and their regulatory responsibilities, but it can be tricky. Technology can remove a lot of the awkwardness and subjectivity in identifying potential vulnerability, while making it easier to determine what support is needed and document the process. But tech is often used for the less personal aspects of the advice process, such as the automation of administrative tasks that are referred to as the ‘heavy lifting’. Vulnerability, by contrast, is about as personal as it can get. We might want adviser tools to nudge the adviser to look at certain things Are algorithms and machine learning appropriate for spotting potential vulnerabilities among clients? Identity challenges Advisers face challenges in identifying vulnerability. One is that clients may not realise their circumstances are a source of vulnerability and, even if they do, they may not volunteer that information. Another is that the Financial Conduct Authority’s definition of vulnerability is broad, covering both temporary and permanent vulnerability derived from a range of personal circumstances. This means advisers, who are neither counsellors nor health professionals, must be on the lookout for everything from financial vulnerability — which is becoming more common as the cost-of-living crisis deepens — to mental health issues. There will always be a cohort of advisers who will say, ‘I know my clients well — I don’t need to do this’ They also need to show the regulator they have a robust and consistent process for dealing with vulnerability, which is where tech can help. “Technology in this space is about supporting the adviser — it doesn’t have to be either the adviser or technology,” says Comentis founder Tim Farmer, a clinician with experience of working with people with reduced capacity, cognition and mental health. “Technology enables me and clinicians like me to give advisers our expertise. This is not a judgement call; it’s robust and objective.” Comentis provides a ‘cognitive assessment engine’ that uses algorithms to identify vulnerability, assess how equipped clients are to deal with their situation, and highlight the next steps advisers should take. It works by asking a set of online questions to identify the circumstances around vulnerability, then a set of psychometric questions to determine the impact on the client. Some advisers want to embrace tech and work with it, while others will take longer and use it when they want to “When you’re looking to identify vulnerability, it’s not just about the circumstances. It’s also about the impact,” says Farmer. “Technology gives advisers insight they wouldn’t otherwise have. It can tell them a client is presenting in this way, and this is what they need to do about it. “Its output can be taken to lead individual advisers, company policies and processes.” Box ticking Data is an important element of identifying vulnerability. Although the human brain cannot compete with tech in processing and analysing data, advisers feel it is difficult to beat face-to-face interaction when establishing a client’s vulnerability status. “Technology can be good for gathering what we call ‘hard facts’ about a client, but when it comes to ‘soft facts’ — emotions, the why, seeing a client’s body language when they are talking about their needs — this can only really be done properly face to face,” says Face to Face Finance managing director Julie Hunt. Tech should be used in combination with an adviser’s expertise and experience “My concern with using technology when establishing a client’s vulnerability is that we are trying to categorise people into boxes, whereas we should be looking at each client as an individual with individual needs.” Firms that believe tech has a role in identifying vulnerable clients concede that relying on it could result in a tick-box mentality, which is why advisers need the freedom to choose what works best for them and for their clients. Eddie Grant, director at the Technical Connection division of St James’s Place (SJP), says SJP’s partner firms have access to Comentis and to the Morgan Ash Resilience System, an online system that provides a resilience rating — like a credit rating — for clients. But there is no obligation to use these tools. “We could mandate it, but then it potentially becomes a tick-box exercise,” he observes. Grant says the key to identifying vulnerability is “putting all the bits of the jigsaw together” to build up a picture, of which technology is a part. As an example, SJP and other firms use voice analytics to spot vulnerability. “If a client calls the advice centre and uses certain words in conversation, voice analytics is a helpful tool,” says Grant. “It flags up the language and tone of voice used. These are positive things to explore.” Technology can act as a useful prompt and highlight potential vulnerabilities However, he is clear the adviser is central. “Advisers have long-term relationships with clients and speak to them on a regular basis. That is a powerful way of dealing with vulnerability, but we might want adviser tools to nudge the adviser to look at certain things.” Key chief executive Will Hale takes a similar view, seeing the use of tech to support vulnerable clients as a natural progression of the way firms already use it to improve their business. “It is through partnerships with technology providers such as Aveni.ai that we will be able to continue to improve and innovate in this area,” says Hale. Collaboration Vulnerability Registration Service chief executive Helen Lord regards collaboration between different organisations, including tech providers, as crucial in identifying and supporting clients in vulnerable circumstances. “There is tech out there to identify vulnerability — to make it quick and automate it — but there’s not a simple answer,” says Lord. “Identifying vulnerability is only part of it. The other part is that firms don’t know what to do when they have identified vulnerability.” My concern is we are trying to categorise people into boxes, whereas we should be looking at each client as an individual with individual needs This feeds into Lord’s belief that many firms are fearful of checking who is vulnerable among their customer base in case the numbers are higher than they thought. “We are trying to help organisations with what to do with people once they are identified as vulnerable,” she says. “But it’s not a simple thing because everyone is different.” Since lockdown, many people have become more accustomed to using technology in their everyday lives, but this may not mean all advisers and their clients will embrace its usage in the area of vulnerability. “What you have to do is work out what people are comfortable with,” says Grant. “Some advisers want to embrace tech and work with it, while others will take longer and use it when they want to. What works for the clients is key.” Technology gives advisers insight they wouldn’t otherwise have Technology does not have to be cold and clinical — hence some children believe Amazon’s virtual assistant, Alexa, to be a real person. However, firms that use technology in relation to spotting vulnerability acknowledge they also need a ‘human touch’. “Although technology can support advisers as they identify how vulnerable a customer is, the human touch is still incredibly important,” says Hale. “Technology can act as a useful prompt and highlight potential vulnerabilities, but it should be used in combination with an adviser’s expertise and experience.” Context Farmer thinks it is important that advisers who use tech to spot vulnerabilities put it into context when explaining it to clients. “If I can contextualise this right and explain to the client that, ‘This is about me as an adviser understanding more about you so I can support you better,’ the hurdles an adviser faces fall and people become more open,” he says. If a client calls the advice centre and uses certain words in conversation, voice analytics is a helpful tool “There will always be a cohort of advisers who will say, ‘I know my clients well — I don’t need to do this.’ “I get slightly nervous about that — but how you overcome it is a challenge.” This article featured in the September 2022 edition of MM. If you would like to subscribe to the monthly magazine, please click here .