Great expectations-

The term 'wealth management' is used a lot in many areas and in its broadest sense describes the combination of investment management, financial advice and planning for high net worth individuals.

However, in reality the term wealth manager is used by many organisations such as independent financial advisers (IFAs), investment managers and others, when they really only provide part of the service an individual would expect.

The definition of wealth management is actually the practice of solving or enhancing an individual's financial situation and achieving short, medium and long-term financial goals. From a self-styled wealth manager's perspective, this doesn't just mean financial management or advice, but the consideration of many other areas. This can include investment planning, tax planning, estate trust and gift planning, insurance, philanthropy and lifestyle investments.

For vulnerable clients, one can add to this the maximisation of and advice on support services, such as welfare benefits, community care, local authority support and others.

Many banks, investment houses, discretionary fund managers and financial advisers offer some of the services outlined, but it is extremely rare to find organisations that offer a full range of services - especially to perhaps the most needful group of clients; the vulnerable Be they the victim of accident or negligence, elderly, infirm or lacking in capacity.

It is very important when advising vulnerable clients that a wealth manager can demonstrate all the previously mentioned attributes. It is also worth mentioning that in addition to the services outlined, it is preferable that a wealth manager to the vulnerable should have a formal social or wellbeing strategy that places the needs, requirements and vulnerability of the clients first and foremost in the mind of the adviser, and his or her company.

In truth, many wealth managers demonstrate only a few of the attributes outlined and virtually none of the social or wellbeing strategies.

Why is this important? First and perhaps most importantly, vulnerable clients are, in truth, different. They have many additional requirements and needs not exhibited by traditional wealth management type clients. Their requirements in the short, medium and long term are usually fundamentally different from conventional clients. Surely then it is vital that in order to advise effectively and professionally, an adviser to vulnerable individuals must exhibit not only the ability to advise on all previously outlined areas, but can also demonstrate perhaps the most important attribute; experience.

Quite regularly, vulnerable clients are given the same sort of advice by a wealth manager that is offered to all their other clients - i.e. not a specific service. I have 35 years' experience in advising the vulnerable. During that time, I can attest that no two clients have ever been the same and with many of our clients, it has been about 'filling the gaps' left by other, non-holistic advisers.

One of my abiding memories is some of the fallout from the financial crisis in 2008. Many vulnerable clients had taken advice from standalone fund managers and wealth advisers who had risk assessed clients and invested them in conventional risk graded portfolios. While our clients largely escaped the volatility of markets due to the holistic planning and goal orientated, risk managed portfolios we ran, we dealt with many vulnerable clients who had lost 20 or 30, and in some instances, upwards of 40 per cent of their portfolio value in a short space of time, due to inappropriate limited advice.

I should stress that the advice was not necessarily wrong, just inappropriate for vulnerable clients with different expectations and goals than the bulk of the advising firm's other clients.

One of the most important and often overlooked aspects of advising vulnerable clients is that their level of risk is very different from conventional clients. This is mainly because the injured, the infirm, those in later life and those without capacity cannot acquire new monies, should they lose some of their pot of investable assets.

This risk aversion, alongside the client's requirements and goals is surely the starting point for a properly qualified wealth manager to the vulnerable. In my experience, many wealth managers and advisers review this issue intermittently and often with limited understanding.

Wealth managers are generally expected to offer financial solutions from across the market spectrum, whereas in reality they tend to gravitate to solutions that are offered by their firm or those they are comfortable with.

What should vulnerable client's representatives look for in a specialised wealth manager?

In essence, a wealth manager to the vulnerable must be able to offer all of the conventionally accepted services, together with all of the value added and softer services created with the vulnerable client in mind. They must always act in the best interest of the client and ensure the best possible outcome for those who face some of the most difficult and traumatic circumstances one could face in a lifetime.

That is not to say that a conventional approach to wealth management cannot work, it is just far less likely to achieve the desired result for the vulnerable individual.

I will also add to the attributes that one should expect from a wealth manager; the delivery of specialist investment solutions.

I have mentioned before that vulnerable clients' requirements tend to be different. Their outcomes are different and their tolerance of risk is different. Therefore, is it realistic to expect conventional investment structures to provide the solutions for vulnerable clients?

In my opinion, not necessarily. Consequently I would add a further characteristic to the attributes that I have outlined; access to specialist and generally risk adverse investment solutions. Of course these solutions can come from any source, whether they be in-house funds, structured portfolios or indeed provided by external fund managers who have a more absolute risk related approach to investment management, rather than the far more prevalent relative risk investment management structures offered by many wealth managers and their investment partners.

Advice to the vulnerable is an area that is attracting more interest from wealth managers for a variety of reasons. Many injury awards are sizeable and attractive to a wealth manager, as are the assets accrued by the elderly and the infirm as they enter into the latter stages of their life. The demographics of the country tell us that this is a market that will only increase in size and therefore attract more advisers trying to offer their services.

It is therefore incumbent upon vulnerable clients advisers to vet the abilities, services and experience of any wealth manager providing advice for their clients. After all, providing wealth management for the vulnerable comes with great expectations and it really is different!

Richard Fraser is the CEO of Frenkel Topping