Dynamic Planner, the UK’s leading risk-based wealth planning and financial advice system, is set to launch a Financial Wellbeing Questionnaire on Friday 16th June. It has been designed to enable advisers to identify vulnerability characteristics in line with Consumer Duty.
Its development and creation has been led by Dynamic Planner’s Head of Psychology and Behavioural Insights, Dr Louis Williams, in collaboration with Dynamic Planner’s fund research team and academics from Henley Business School, part of the University of Reading.
The launch forms part of Dynamic Planner’s long-term commitment to helping investors better understand their financial situation and is an integral addition to Dynamic Planner’s suite of investor profiling questionnaires. Advice firms can now assess a client’s risk appetite, sustainability preferences and vulnerability characteristics in one place.
Aligned with key questions and the algorithm of the FCA’s Financial Lives Survey completed by 22,000 people, Dynamic Planner’s Financial Wellbeing Questionnaire has been rigorously tested with over 1,000 UK investors, providing the means to understand a client’s individual differences and needs. Incorporating all elements to support the four key drivers of vulnerability as set out by the FCA, it meets the requirements of Consumer Duty to identify vulnerabilities and those who are susceptible to harm, so that appropriate support can be provided.
Louis Williams, Head of Psychology & Behavioural Insights at Dynamic Planner said: “With the first deadline for Consumer Duty imminent, the launch of our Financial Wellbeing Questionnaire powers the identification of vulnerabilities with technology, enabling financial advisers to assess individual clients across four key areas: health, life events, resilience, and capability.
“Aligned with the FCA’s Financial Lives Survey and designed in collaboration with academics from Henley Business School, it provides advisers with a solution to the call to action set out by Consumer Duty to assess a client’s vulnerability characteristics.
“We are committed to supporting advice firms in helping their clients better understand their financial situation and choose investments that are suitable to fund the life they want. The Financial Wellbeing Questionnaire is another example of us delivering on that commitment.”
Financial advisers using the Financial Wellbeing Questionnaire with their clients will receive a report for their Consumer Duty record which highlights areas of vulnerability. The report includes insights and tips to help with life’s challenges to share with the client and aims to encourage higher levels of resilience so that a client’s level of financial self-efficacy and wellbeing increase.
Using Dynamic Planner’s Financial Wellbeing Questionnaire with Clients
- Dynamic Planner’s Financial Wellbeing Questionnaire is intended to be used as part of a broader advice process that has already considered risks, costs and complexity of the financial product being recommended to a client.
- In line with the FCA, the questionnaire includes objective measures to understand the client’s current situation as well as subjective measures that explore how the client feels and their abilities to cope, which are both important for assessing client vulnerabilities.
- Psychometric items have been included, for example, examining a client’s emotional resilience when faced with financial challenges, confidence in their abilities to manage their finances, abilities to tolerate difficult and uncertain periods, and the healthy or unhealthy strategies used to regulate their emotions.
- Clients can inform their adviser about any health conditions they have or challenging experiences they’ve faced. Additional questions then explore the severity of this condition/event and how it interferes with day-to-day life and whether someone is of low, moderate or high vulnerability.
- Questions included to assess client’s resilience and capability cover a range of vulnerability characteristics where Dynamic Planner’s algorithm, based on that which underpins the FCA’s Financial Lives Survey, identifies whether a client’s vulnerability is low, moderate, or high (see below).
Financial wellbeing results indicating the level of vulnerability for each of the four drivers
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