One in five people in the UK have experienced financial abuse in an intimate relationship. That means that if you are a wealth manager or financial adviser, chances are you have come across a client in this situation.
But would you recognise the signs if this was one of your clients? Of the third of those who actually report financial abuse, 32% told a friend and 31% a family member. Much fewer told a financial institution.
Financial, or economic, abuse is when one person has control over another’s access to economic resources. Parliament's upcoming domestic abuse bill will introduce the first statutory government definition of domestic abuse to include economic abuse.
Last year out sister publication New Model Adviser® spoke to Surviving Economic Abuse (SEA) director Nicola Sharp-Jeffs and Equanimity IFA managing director Helen Howcroft about training and support for advice businesses in recognising and supporting clients who have experienced financial abuse.
This training and support must currently be sought out by independent advice and wealth management firms, although signing up to the voluntary Financial Abuse Code of Practice can help provide guidance, but in other areas of financial services, support is being formalised.
Last week SEA and debt-advice organisation Money Advice Plus launched a service for banks and building societies to improve their responses to survivors of financial abuse. The service includes a helpline, training for bank and building society staff, a toolkit to help guide customer interactions and resources for survivors.
The service is being led by SEA’s new banking and insurance advocate Christina Govier, who said it will provide support for institutions to ‘deliver an informed and high-quality service to customers who may be experiencing economic abuse’.
Fiona Cannon, sustainability and inclusion director at Lloyds Banking Group, added the extra resources would be 'fantastic' for banks looking to support their clients.
'We see the wide-reaching impact domestic abuse can have both through our interactions with customers and colleagues…we know many victims are not aware of economic abuse and the way it can lead to financial exclusion.’
The Financial Conduct Authority (FCA) is expected to publish a review on the implementation of vulnerable client policies later this year. SEA said it would draw on this new service ‘to advocate that bodies such as the FCA explicitly recognise domestic abuse victim-survivors as vulnerable’.