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A man experiencing vulnerability because of his debt

Vulnerability and Debt

One of the most significant and topical issues in the money advice industry at present is that of vulnerable clients. Working with people who have, by definition, experienced very difficult circumstances can be extremely challenging. Money worries cause a level of emotional and personal distress that demand a high level of care and service. After all, individuals don’t seek compromise agreements with their creditors because things have been going well; they seek help because they’ve experienced unexpected — sometimes permanent — turbulence in their personal life. It goes without saying that such change is very traumatic.

What Is Considered Vulnerable When It Comes to Debt?

How do we define vulnerability, and what measures can be taken by advisors to alleviate the stress clients are under? According to Stepchange, a workable definition of vulnerability in the context of debt is someone finding it difficult to address a debt problem because of their personal and financial circumstances. The FCA has also published guidelines for vulnerable customers

Issues that engender vulnerability include but are not limited to stress, bereavement, mental health conditions, long-term illness, disability, separation, homelessness, suicide and addiction. The list is not exhaustive, but issues such as these can induce a feeling of helplessness for individuals.

The existence of these underlying factors can prevent those afflicted from seeking the help they need. Those in need of debt help sometimes avoid seeking it out of fear of judgment, embarrassment or any of the other negative emotions that debt can induce. Some also fear that the people they speak with either won’t take their vulnerability into consideration or won’t be sufficiently empathetic to understand.

It’s a matter that requires sensitivity and tact, and an understanding that vulnerability is a serious consideration. While the vulnerability of an individual has always been important in the context of giving good debt advice, the industry is now under a greater obligation than ever before to ensure that vulnerability considerations are at the heart of client engagement, and constantly reviewed and reassessed throughout the client’s journey. 

Vulnerability Matters

To that end, the Money Advice Trust has launched some useful “vulnerability guidance”  to provide some clarity to debt guidance and money advice agencies with regards to how they treat their vulnerable clients. The Trust’s guidance reflects an increased focus on vulnerability and debt within the industry.

The Trust mentions a recent survey by the Money and Mental Health Policy Institute that highlights the need for advice agencies to improve the way they address clients with mental health conditions. Worryingly, the survey revealed that 35% of respondents believed their mental health problem hadn’t been taken into account, even though they’d informed their advisor about it. The benefits of a more coherent approach within the industry are obvious, but there are plenty of actions individual advisors can take to help vulnerable clients.

Attitude is crucial, and building rapport is an essential component of effective client interaction. Vulnerable clients need to have trust in their advisor and be confident that their worries will be addressed in a caring, empathetic and compassionate manner. Clients also want to be assured that they won’t be judged in any way.

How Debt Movement Can Help

At Debt Movement, we are guided by a set of values to not only put our clients first but also demand a caring and compassionate approach at all times. We take care to be non-judgmental in our attitude too. Many of our clients suffer from mental health issues, and we have worked hard to tailor our approach accordingly. Teams at Debt Movement have undertaken some initiatives specifically designed to address the issue of client vulnerability.

For example, we trained staff members to identify potentially vulnerable clients and provided techniques to identify those in need of help. More training is planned for later this year on this subject. Our teams will always ask clients who are vulnerable if they’re happy for their vulnerability to be recorded and reported to creditors so that the totality of their circumstances is acknowledged, communicated and taken into consideration at creditors’ meetings. 

The issue of vulnerability and the best way to address it is only going to become more pronounced within the money advice industry, and awareness is crucial. Therefore, if you’re affected by such issues, you can contact Debt Movement today and be sure that our team of friendly and compassionate guides will treat your concerns with the care and empathy they deserve.

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