Following the release of the Financial Conduct Authority’s Occasional Paper – Ageing Population and Financial Services – RedArc’s managing director, Christine Husbands, suggests a third party ‘buffer’ could be beneficial for all parties:
“Our experience shows that consumers do not adequately consider the risks of changes to their future personal circumstances such as ill health or mental capacity, which reinforces the need for financial firms to step up. We are therefore pleased to see the FCA recognising this growing and vulnerable group, and believe that the report suitably recognises the likelihood of older people to experience significant life events and have serious changes in physical and mental health – which can all severely affect capability.
“A point that seems to have been largely overlooked in the report was the potential of putting in place a buffer or third party, in between the firm and the vulnerable person, in order to provide some impartiality and discretion. The third party would be an expert in dealing with later life issues and so the individual would benefit, and the organisation itself is also protected from criticism, or worse.
“The report repeatedly recognised the need to train financial service staff to identify and support older customers who are experiencing problems. Recognising that there is a problem is generally quite self evident and perfectly achievable after training, but the ongoing support is not only time-consuming but more challenging to deal with: for example, expecting a mortgage adviser or loans expert to differentiate between someone with early onset dementia, someone suffering the effects of a recent bereavement or more general mental health problems is quite a big ask of staff and an incredibly delicate situation to manage.
“There is a parallel here within the field of HR, where even the most capable HR departments put in place ‘Employee Assistance Programmes’ which were administered by third parties to demonstrate the employer’s commitment to the wellbeing cause. The HR department may have actually been able to deliver this independently but the perception was that they’d bought in to the best which was very well received by staff.
“Even if a financial services firm is an expert in its dealings with older people, hiring a third party buffer would be a robust assurance that it is taking its responsibility seriously and also would potentially avoid any comeback if a situation wasn’t handled to the individual’s satisfaction. “Rather than an ambitious programme of training for all customer-facing staff to deal with the vast array of issues that affect this vulnerable group, a more manageable option might be to undertake a basic level of awareness training and then allow experts to step in where specific knowledge and insight is required.”