March 19th, 2024
How to spot financial abuse, and why financial planning could help your vulnerable clients
Financial abuse describes the financial mistreatment of another person, including withholding funds from them, coercing them into giving over their money, or stealing from them regularly.
Sadly, a report from FTAdviser reveals that according to the Office for National Statistics (ONS), approximately 1.5 million older adults in England experienced some sort of financial abuse in 2020 alone.
What’s more, older people are not the only individuals who could be vulnerable to financial abuse; anyone of any age can experience it. Aviva reports that 2 in 5 Brits have been through financial or economic abuse in their lifetime.
Although it may seem as if the signs of financial abuse would be obvious, especially to an experienced professional like you, this is not always the case.
As such, it may help to refresh your understanding of what financial abuse can look like, along with the steps you could take if you suspect a client is being victimised.
3 subtle signs of financial abuse
Perpetrators of financial abuse are usually very close to the victim – either a family member, a close friend, or even their carer. This means that this person is often seen to be acting in the victim’s best interests, and the signs of what they are doing may not be immediately evident to you.
So, here are three subtle signs of financial abuse to look out for.
1. Unexplained cash withdrawals
If a vulnerable person entrusts a family member or carer with their debit or credit cards, for instance to do their weekly shop, it makes sense that some cash may be withdrawn on a regular basis.
However, if this client doesn’t know where some of this money has gone, or underestimates what the helper has been spending, it could be a sign of theft.
2. A client having limited access to their own money without a Lasting Power of Attorney in place
Some clients may have a Lasting Power of Attorney (LPA) in place, which names a trusted individual to make financial decisions on their behalf.
However, if a client seems to have entrusted another person with all their financial affairs without any official documentation in place, this could be cause for concern.
3. Discomfort when talking about the details of their money
When meeting with your client, if you notice that they are uncomfortable when speaking about money, or consistently defer to their spouse, family member, or carer for answers about their wealth, it could be a sign that they are not being permitted to make their own choices.
While this is not always the case – some clients may simply lack financial confidence – observing how your client feels when discussing financial topics might help you to spot signs of financial abuse.
In isolation, any of the above instances could have an entirely innocent explanation attached to them. However, if you are concerned for a vulnerable client’s financial wellbeing, it could still be worth taking the following steps.
2 steps to take if you suspect a client is experiencing financial abuse
1. Use helpful online resources to contact an expert
Organisations such as Age UK and Citizens’ Advice have experts dedicated to identifying financial abuse and protecting victims. The government has also issued an Economic Abuse Toolkit with plenty of resources for those experiencing financial abuse.
Contacting these organisations directly could lead you to obtaining professional, impartial advice on what to do next.
2. Contact the police
If you strongly suspect theft, fraud, or coercion, it may be appropriate to contact the police.
Bespoke financial planning could help to protect vulnerable clients against financial abuse
If you have vulnerable clients, including older individuals, clients living with disabilities or long-term illnesses, or those with mental ill health, connecting them to a financial planner could be extremely beneficial.
Not only will a financial planner strike up a long-term, personal relationship with this individual, but we can offer significant protections for those who may be vulnerable to financial abuse. These include:
- Giving them access to all their financial information in one place
- Being on the end of the phone to answer any questions without delay
- State-of-the-art software that can help to identify and protect vulnerability characteristics for clients
- Peace of mind that a qualified professional is overseeing the details of their financial plan.
If you have clients who would benefit from financial planning, put them in touch with us today. Email enquiries@prosserknowles.co.uk or call 01905 619 100.
Please note
This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.