Two issues that will be on the minds of most mortgage advisors right now are Consumer Duty and client vulnerability. The two are linked, because Consumer Duty requires advisors to identify potentially vulnerable clients and do everything possible to help them.
Thanks to living costs, rates and mortgage payments all rising, that is a growing number of people. In this blog, we’ll take a look at how advisors should approach the matter.
Assess on an individual basis
The Financial Conduct Authority (FCA) has responded to Consumer Duty by telling advisors to identify vulnerable clients based on their different target markets, but a more individual approach may be better. It’s important to assess each client separately and look at their situations. No two clients are likely to be experiencing exactly the same circumstances.
Be prepared to advise against
It will seem strange to most people who have completed the CeMAP mortgage advisor qualification, but sometimes you may need to advise people against taking out a mortgage right now. If their circumstances could make repaying it precarious and may have a detrimental effect on their health at a later date, it is something that Consumer Duty means advisors must consider.
It is unlikely to be applicable in the majority of situations, although it may be necessary occasionally. Ultimately, the aim must always be to achieve the best possible outcomes for the client, both right now and in the future. This is particularly the case as the economic climate is liable to remain uncertain for some time to come.