Even if some of your clients seem fine on the surface, they may be vulnerable in ways that are far trickier to identify.

While many manage these difficulties privately, some may require extra care or protection, especially when making financial or legal decisions that could affect their long-term wellbeing.

The Financial Conduct Authority defines a vulnerable person as “Someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.”

Vulnerability can come in many forms, and this might include people with:

• Disabilities
• Severe mental health challenges
• Significant debts
• Struggles with addiction

As a legal or financial professional, you are often well placed to identify vulnerabilities early and help your clients take proactive steps.

So, continue reading to discover five practical ways solicitors and financial planners can support more vulnerable clients.

1. Register a Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is a legal document that allows your client to appoint one or more trusted individuals to make decisions on their behalf should they lose mental capacity.

There are two main types of LPA in England and Wales:

• Health and welfare – This gives an attorney the power to make decisions regarding daily routine, medical care, whether a client moves into a care home, and any life-sustaining treatments they may need.
• Property and financial affairs – This allows an attorney to make decisions about managing bank and building society accounts, paying bills, collecting benefits such as a pension, or even selling a home.

A client must have full mental capacity when establishing an LPA.

For vulnerable clients, an LPA ensures that trusted people, rather than the courts, make decisions in their best interests.

It could even reduce the risks of financial abuse and ensure that any healthcare and welfare choices align with your client’s wishes and values.

Encouraging your clients to put an LPA in place before it’s too late could spare them and their families from complex challenges later down the line.

2. Set up a trust

Trusts allow clients to set aside certain assets, such as money, property, or investments, for a beneficiary to use in the future.

Clients can specify exactly how and when their younger loved ones can use the wealth. They could, for instance, state that they can only access it once they’ve completed higher education.

This might provide ongoing protection for beneficiaries who currently don’t have the discipline to manage significant sums of money.

It could also prevent potential financial abuse by keeping assets under the watchful eye of professionals.

Trusts can also benefit your clients by reducing their tax liability. Indeed, any assets placed within them are typically removed from a client’s estate for Inheritance Tax purposes.

For more vulnerable clients, this control and flexibility can be invaluable.

3. Write a “letter of wishes”

A letter of wishes allows clients to make any personal requests that would accompany their will or trust.

While they aren’t legally binding, they can provide valuable context for executors and trustees, clarifying how your client would like their estate or specific assets to be handled.

A letter of wishes can be especially beneficial for vulnerable people or those supporting beneficiaries dealing with challenges.

For instance, if a client has a degenerative condition, a letter of wishes could guide attorneys, trustees, or family members in understanding their values and preferences.

Advising any clients to create one alongside their will could add a vital layer of clarity.

4. Plan for care

Planning for care is another area where professional guidance can make a significant difference to vulnerable clients.

Many people underestimate the financial and emotional challenges involved with long-term care. Helping them plan early could allow them to make more informed decisions about:

• Where and how they wish to receive care
• How it will be funded
• Who will be involved in managing their affairs.

For more vulnerable clients, this could reduce anxiety and prevent rushed or inappropriate decisions during a period of difficulty.

You could also protect clients from potential exploitation or mismanagement by ensuring that they understand the legal implications of care contracts and property ownership.

5. Provide debt management assistance

Financial vulnerability can also come in the form of unmanageable debt. Indeed, some clients might struggle to keep up with repayments due to illness, redundancy, or life changes that affect their income and stability.

By reviewing their financial situation, you can help clients prioritise their high-interest debt, negotiate with lenders, and explore other solutions, such as debt management plans.

You can also ensure they receive fair treatment from lenders.

For clients whose vulnerability comes from emotional challenges, your support could prevent any financial stress from worsening.

Get in touch

We could help you manage your wealth so you can focus more on supporting the needs of your clients.

Email info@blueskyifas.co.uk or call us on 0118 987 6655 to find out more.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or Lasting Powers of Attorney.