Vulnerable Clients

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Vulnerable clients come in many forms:

  1. Their income.
  2. Their lifestyle.
  3. Their expenditure, AND,
  4. Their understanding of the value of cash, AND,
  5. Their understanding of how much money they need to retain in cash, etc.

Culminating in a measure that determines the amount of capital they can lose before it has an impact on their lifestyle or their mental health, which, demonstrating the value of cash significantly helps.

If the cash is held in dormant savings accounts, a client will generally hold more on deposit than is really necessary. Whereas, if the cash is managed effectively, to maximise its value, the client will have a better understanding of their requirements and will more often than not, realise they have a greater Capacity for Loss than they first realise.

This completely changes the suitability of the advice, which puts both the client and the financial adviser in a much stronger position.

A client’s decision to remain in cash should be based upon the value they can achieve from cash, not on the poor value they are getting from cash.

Strangely, though, clients generally INVEST MORE when they understand
the value of their cash

The only way to discount the guaranteed security and returns available from Cash is to make sure the REAL VALUE is understood.

In the vast majority of situations, a client cannot meet their financial objectives by leaving their money in cash, even when its value is maximised.

Maximising the value of cash does not negate the need to invest for better value, but it does better protect the advice and it does enable the client to make more informed decisions.