PIMFA, the trade association representing wealth managers and financial advisers across the UK, today publishes new guidance to help member firms identify and respond to economic abuse. The guide has been developed in partnership with law firm Eversheds Sutherland and gives firms a practical framework for supporting clients who may be experiencing financial control or coercion.
Economic abuse is present in an estimated 95% of domestic abuse cases, yet remains one of the most overlooked forms of harm across financial services. Research by Surviving Economic Abuse and Ipsos UK found that one in seven UK women, equivalent to 4.1 million, experienced economic abuse from a current or former partner in a single year. Nearly half of victim-survivors do not recognise their experience as abuse.
Wealth managers and financial advisers are often well placed to spot the signs. The relationship-based model that defines the sector, built on regular personal contact and detailed knowledge of a client’s circumstances, gives advisers a vantage point few other professionals have. An adviser who has known a client for years may notice when their demeanour changes, when a new third party starts attending meetings, or when instructions stop matching previously expressed wishes.
There is no single rulebook telling firms how to respond to economic abuse, and market practice remains inconsistent. The FCA has put vulnerability and good customer outcomes at the centre of its agenda, with the Consumer Duty requiring firms to avoid foreseeable harm and its Vulnerability Guidance identifying domestic abuse, including economic abuse, as a driver of vulnerability.
The guidance is designed to give firms a clear, practical and proportionate framework that fits within existing business structures. It includes:
- An explanation of what economic abuse, financial abuse and coercive control are, and how they present in a wealth management and advice context
- A summary of the legal and regulatory landscape, from the Consumer Duty and the Equality Act to powers of attorney, trusts, joint accounts and Small Self-Administered Schemes
- Practical guidance on strategy, culture and governance, including the role of a named Senior Manager
- Advice on identifying abuse, encouraging safe disclosure and supporting clients in a trauma-informed way
- Anonymised case studies with practical dos and don’ts, designed to be used directly in staff training
- A recommended-adjustments checklist for firms to review and implement across their service
The guide is clear that firms are not expected to investigate abuse or to determine whether it is taking place. The emphasis is on supporting clients, avoiding further harm and connecting people with specialist help. It also makes the point that high net worth offers no protection, and that complex wealth structures can in some instances create more sophisticated opportunities for control.
Alex Roberts, Head of Regulatory Policy and Compliance at PIMFA, said: “Economic abuse is one of the most common and most overlooked forms of harm, and it can affect any client whatever their wealth and financial circumstances. For our sector this goes to the heart of whether a firm is genuinely delivering good outcomes for its clients.
“Advisers are often the people best placed to notice when something is wrong or when circumstances shift, perhaps a change in who is making the financial decisions, or in how a client engages with their own money. But many tell us they are unsure how to respond. This guidance is about giving firms the confidence to act. It sets out what economic abuse looks like in a wealth context and how to support clients safely, without a firm having to step into the role of investigator.”
Gareth Vowles, Partner at Eversheds Sutherland, added: “Economic abuse can be difficult to identify because it often sits behind otherwise legitimate financial arrangements, family relationships and decision-making structures. For firms, the challenge is understanding when ordinary financial interactions may be masking a wider risk to a client’s financial autonomy and wellbeing.
“This guidance helps translate a complex legal and regulatory landscape into practical, proportionate steps that firms can take within their existing frameworks. Our aim has been to help advisers navigate these situations with greater certainty, while remaining focused on delivering good client outcomes and respecting individual choice.”
Read the full guidance (access for PIMFA members only): https://www.pimfa.co.uk/shared/preventing-economic-abuse/