In Focus: Vulnerability  

How to help vulnerable 'Divorce Day' clients

  • To understand how divorce matters for financial vulnerability
  • To recognise the soft skills advisers need
  • To be able to explain tough financial decisions in a clear and empathetic manner
CPD
Approx.30min

Mr McLoughlin concurs with that assessment: "Financial advice actually can be incredibly useful at the divorced stage and many lawyers now openly advocate seeking this.

"There is the obvious subject of pensions sharing, but many other areas where a divorce will result in completely new advice."

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However, due to the increased vulnerability of the clients who find themselves going through divorce, Mr McLoughlin advocates employing those soft skills - such as showing understanding and diplomacy.

He says: "The adviser will need to show empathy and support and be aware of the fragility of the situation."

Education and a professional hand on the tiller are key aspects, according to Swindon-based Dermot Brannigan, who explains: "It’s important for an adviser to tell people what they need to know, not just what they want to hear. Your job is to remain impartial and guide them through what can be a particularly difficult time.

"If both parties want you to remain as their adviser then they obviously trust your integrity and privacy. But you need to make sure you aren’t producing a conflict of interest."

But soft skills are also needed here - in spades. Treading that balance between advice and empathy is not easy. 

Adviser Tamsin Caine, director of financial planning for specialist adviser Smart Divorce, comments: "It is a tricky one."

She says she meets most of her clients when they’re divorcing, working either with them as individuals or as a financial neutral with the couple. The latter means working with neither after the divorce.

For her, the "beginning point is about informing and educating.

"However, peace of mind and clarity about what settlements mean is vital when you’re going through divorce. It’s a delicate balance between financial and providing support and empathy."

Fiona Sharp, chartered financial planner for Verve Financial, agrees: "We do support [divorcing] clients emotionally more than 'normal'.

"We are there to try and prevent financial knee-jerk reactions. It is so important to have a network of other professionals (family consultants or psychologists, for example, to whom we can signpost clients if required."

Financial planner Ed Gibson echoes these sentiments: "Listen; question what is truly important; provide balance; act as a sounding board; try to prevent them making any big mistakes; help make sense of the financial stuff."

Finally, Mr Brannigan says, assessing a client's attitude to risk "becomes increasingly important afterwards". People who feel financially vulnerable - even if they are not in reality vulnerable - might put themselves at risk by making knee-jerk decisions.

He says advisers should make sure a client doesn’t "artificially want to increase their risk in the belief they need to recover a perceived loss of funds".