Chartered Financial Planner of the Year Robin Melley explains to Liz Booth how he assists clients in vulnerable circumstances
We all have moments of vulnerability, which means financial planners must improve their handling of clients who may be having a bad time. That’s the committed view of multiple award-winning Robin Melley, founder of Matrix Capital.
Mr Melley was recently named Chartered Financial Planner of the Year at the Personal Finance Awards because of his commitment to supporting people at the moment of vulnerability. He explains that it is a subject close to his heart and one that he believes the whole planning profession needs to become more closely associated with.
Pointing to the Financial Conduct Authority’s consultation ahead of new guidance on the issue, he says it is clear that the regulator wants to see improvements.
But Mr Melley stresses that this is not about people themselves being vulnerable: “People are not vulnerable. People are people, but they may be in vulnerable circumstances.
“People consider themselves resilient and capable, but then may be hit by an illness, a bereavement or a traumatic life event such as a divorce – and at that moment they are vulnerable.
“One of my clients was in just that place when he got scammed. He was a highly qualified professional and would have not been your archetypal victim of scamming; but at that particular moment he was vulnerable and the criminals took advantage.”
In practice, he says, financial planners need to be much more aware of those risks: “Sometimes clients will be healthy and sometimes they are not; and we need to be mindful of those changes in their circumstances. This is not about their age, poverty or levels of qualifications.”
Mr Melley spends a lot of time explaining the difference in approach, not just to clients but also to other professionals. “As financial planners, we spend a lot of time interacting with other professionals – solicitors, accountants, etc – and it is important we all work together on this,” he says.
Again, he cites a recent example of chatting to a local solicitor about the risks around vulnerability, particularly in these challenging, Covid-afflicted times: “The solicitor told me that my definition of vulnerability had turned on a light for him. The wordings had encapsulated the way we should be approaching our clients.”
Mr Melley says that too often, professionals work in silos. “Everyone is doing good work but we are working on our own. This needs a multidisciplinary approach. If someone has a medical problem, the health services have become very efficient at having case meetings and working out the solutions as a group.
“As financial professionals, we need to be taking the same approach around vulnerability. Working together will deliver the right solutions to our clients and reduce the risks around their vulnerability.”
In the current economic climate, Mr Melley fears that more people might have extremely vulnerable times ahead.
Another example, he says, was a doctor client who told him of how families collect at the bedsides of a vulnerable person, urging them to change their wills. “The doctor said he had not properly understood the risk or seen it as his place to intervene, until we had spoken about it. It is that kind of collaboration that we need to explore, while recognising the wide scope of the problem,” says Mr Melley. “The objective is to help support people in vulnerable circumstances to get a better outcome. There are times in our lives when all of us would benefit from caring but dispassionate advice. We all need professional support at some point and our approach as financial planners must be in being available to offer that when required.”
That does require additional skills, however, acknowledges Mr Melley. “The client may disclose something to the person taking the call to make an appointment that they don’t feel able to tell the planner. Everyone in our business needs to understand they have a role to play in delivering the best outcome to the client. Not only must that person at the initial point of contact be prepared to be a listening ear, they need to know what to do with that information.”
The first thing he did with his own company was to devise a robust policy that everyone in the organisation could understand and follow.
“It is good business practice to have such a policy in place – but it needs to be a living and working document,” stresses Mr Melley. “We followed this up with basic training for all the team and made some changes, particularly with our financial planning questionnaire.”
This, he explains, has been designed to cover the four main drivers of financial planning: health, life events, resilience and capability.
Other professions, such as the medical profession, architecture, engineering and law are all generally regarded as a trusted source of ongoing advice and support by the general public. Even though members of those professionals have sometimes proven to be negligent and in some cases malicious, the bad press has never really dented the way in which the general public view their GP, for example, and still trust the advice they receive.
“By contrast, financial planning and financial advice to date seems to suffer badly from a reputational point of view when issues occur, even when caused by a very tiny proportion of the whole profession. These types of disasters in the profession have huge long-lasting ramifications in terms of reputation, credibility, professional indemnity insurance costs, regulatory intervention and levies.
“Ultimately, my message to other financial planners is that we all need to raise our game in terms of technical competency but also improve these soft skills,” he concludes.
Robin Melley is the PFS’s Chartered Financial Planner of the Year, managing director of Matrix Capital and a member of the Financial Vulnerability Taskforce steering group.
To join the taskforce visit: www.thepfs.org/financial-vulnerability-taskforce
Liz Booth is contributing editor of PFP