Farmer explained that, as it stands, the Financial Conduct Authority requires brokers to assess the vulnerability of customers within the later life space.
He went on to say that the best way to do this is to break down the assessment into an analysis of the customer’s health events and life events which may impact their mental wellbeing.
Looking into how an individual copes with health-related stress and life-related strain such as divorce or the death of a loved one, provides a clearer picture into the mental state of the customer.
The ability to work through stress and find or develop coping mechanisms is important for a customer to maintain their mental wellbeing.
Farmer said: “Knowledge and understanding on the broker’s part is the best way to improve the pro-cess for customers and help provide them with better results.”
He added that for Comentis, its first step is to identify the customer’s ability to cope with stress.
“It is important to always bear in mind that every customer is different, and everyone reacts differently even when in the same situation,” Farmer said.
He went on to add: “For example, an immediate relative dying for one person might be completely devastating, whereas for another they may be unbothered.
“Divorce is another example where we see very varying reactions. Some people struggle to recover from divorce, whereas others are happy that it has ended.”
Assessing vulnerability and mental wellbeing can be summed up through a simple analogy, according to Farmer.
He said: “If you smash an egg with a hammer, you know it will break into many pieces, but what you do not know is how many pieces there will be, or the shape and size of those pieces.”
In addition, Farmer said it is important to bear in mind the differences between generations.
Different generations react slightly differently to certain challenges or situations, and therefore Farmer believes brokers need to be aware of this.
Farmer explained: “Studies have shown that as you get older you become able to deal with negative impacts on yourself better, however you become worse at dealing with negative outcomes befouling those around you.”
As a result of this, Farmer said that this makes the older generations more likely to become a victim of financial crime.
This is also due to their health gradually deteriorating which will impact their ability to make decisions.
“It is important those customers within the later life space are correctly advised and supported in order to help them avoid becoming victims of financial abuse,” added Farmer.
Another important factor to consider when assessing customers is cognitive bias, Farmer explained.
This is where the brain jumps to a conclusion based on only part of the information, which Farmer said is a very common function.
Looking to how Comentis can be employed, the app is designed to provide objectivity and remove any bias from the decision-making process
“The human brain is very lazy and will jump to assumptions based on part of the information, which leads to incorrect decision making and errors,” said Farmer.
He added: “Our app removes the possibility of mistakes based on bias and therefore provides better customer outcomes.”
The way the app assesses health events and life events is by asking the customer a series of questions, and then proceeding to review what they answered and how they answered.
This identifies how they will react in the face of adversity and provides an answer to how well they will deal with it.
Farmer said: “The assessment process cannot just be a tick box exercise, it has to correctly identify the vulnerability of customers as well as their mental wellbeing and state.
“Our app guides brokers through the process, but it also takes them along the journey which we believe helps educate and inform brokers on why decisions have been made, which improves their understanding of vulnerability and reveals the mental state of their customers.
“We can provide the answers without the bias.”
