Wealth management firm James Sharp has implemented the MorganAsh Resilience System, to assess, measure and report on their customers’ vulnerability, in line with the Consumer Duty requirements.

James Sharp has been advising clients on investments for over 160 years and is one of Manchester’s oldest financial services firms. The firm wanted to enhance its existing customer-relationship approach to better evidence the heightened requirements that Consumer Duty brings. To achieve this, it decided to upgrade the way it assesses and records vulnerability – so that it would be done in a way that delivered the richest possible data, as well as assuring compliance.

Following discussions with regulatory consultants, James Sharp contacted MorganAsh, to explore the use of MARS. The firm adopted the platform and was ready, on time, for Consumer Duty.

MARS aims to take the complexity away from assessing consumer vulnerability, using input from consumers themselves to generate an objective measure of vulnerability which can be tracked over time.

Sheriden Davy, chief risk officer at James Sharp, said: “Prior to implementation of Consumer Duty’s enhanced expectations, we believed assessing vulnerability was pretty easy – since this is part of what we do every day. However, we wanted to get a better understanding of our clients – and realised that we needed external, expert help, as assessing vulnerability isn’t really our expert domain. Our assessment could perhaps be likened to a nurse asking if someone is rich or poor.

“Not only is a binary question worse than unhelpful, to do it properly you need a good degree of understanding, plus a methodology to provide consistency and a way to manage the data – so you can report on it as needed. It became clear that to do this properly would take a lot of training and administration. The MARS tool negates the need for extensive training and handles most of the administration automatically, making this a far more cost-effective approach to consumer vulnerability.”

Andrew Gething, managing director at MorganAsh, added: “Everyone evaluates vulnerability differently, which leads to wildly inconsistent assessments. One way to overcome this might be to create a manual of every vulnerability, along with all the possible levels of severity – and then train all your advisers. You then need to build IT systems to store and report on the data – at a not inconsiderable cost.

“In contrast, MARS cuts assessment and administration right down, removing much of the need for training, plus doing away with the need to create and maintain cumbersome manuals – and it’s prebuilt, ready to go. We estimate that the benefit-to-cost ratio of using MARS, versus a manual approach, is around six-to-one.

“There’s no question that advisers know their customers – but, after using MARS for just a few months, most advisers tell us they’ve uncovered consumer vulnerability they were previously unaware of. As a result of this, they were able to quickly adapt and be sure that vulnerable customers were receiving as good outcomes as those who were not vulnerable.

“Typically, this change is highly appreciated by the consumer – and has got to be good for both adviser and consumer over the long term. Enhancing relationships with customers is probably one of the most valuable outcomes of using MARS, and just as beneficial as meeting the regulatory requirements of Consumer Duty.”

Recently, MorganAsh released upgrades to MARS, including the ability to trigger appropriate treatments (next steps) when customer vulnerabilities are detected. Automating this further relieves advisers from having to train and understand the multitude of vulnerabilities and treatments. Effectively, firms’ vulnerability policies are automatically presented for each client as and when required.