When Competence Is Neither Black Nor White
Anyone who has spent time around older adults, whether they be family members, friends or your clients, probably knows someone who seems “with it” sometimes and “not with it” at other times. They can change from making sense to not making sense in a matter of minutes or hours. Do you think of this person as competent? Do you overlook all the little “slips” and signs of their not being able to track the conversation? Do you treat the person as if everything were fine and normal? Here at AgingInvestor.com, we refer to the in-between state of mind as the grey zone. It describes a person in a way that is neither black nor white, neither completely without decision-making ability nor completely safe in decision making. It is a variable problem and one nearly all of us are going to witness sooner or later. Why?
Why should we expect to see this in aging clients or others in our lives?It is because of the increasing risk of dementia with age. What is dementia? Dementia is a symptom, rather than a disease in itself, though many often use the term “dementia” interchangeably with Alzheimer’s Disease or other form of brain disease related to aging. We can just call it dementia for simplicity’s sake. If a person is diagnosed with dementia, it means that he or she has demonstrated enough signs of the disease for a doctor to conclude that it is present and that the signs and symptoms are not from some other cause.
The risk of dementia rises with age. Our population is living longer than ever before in history. That is why we should expect to see elders with dementia in our midst. The chances of developing dementia for a person who has reached age 85 or more are about 1 in 3. And that refers to those who have received a diagnosis. In our work at AgingParents.com, our related site for information about aging for families, we often see and communicate with adult children who have aging parents. We hear over and over “my dad probably has dementia, but no doctor has ever told him that.” And it is likely that there are many people who have early dementia with early memory loss being the first sign to emerge, that do not go on to develop clear evidence of dementia because they succumb to other age related disease before that happens. It is a disease that can develop slowly, over many years.
How does this affect YOU? So what does this all have to do with financial services people and their clients? The point is that memory loss and eroding capacity affect the ability to understand and make decisions. Financial matters, investments and financial products are complex enough. That’s why clients pay you, the advisor for advice and management. When a person’s mind is affected by dementia, or even early memory loss, their ability to track what you say, and to understand your advice is going downhill. We do not want you to stand idly by, thinking you can just carry on as usual until “something happens”. The something that may happen is that an heir, a relative or anyone close to the elder can be harmed by poor financial judgment of an aging adult. The elder can harm himself by disastrous financial decisions coming from a mind affected by brain disease. Those very heirs and family may look to you for an explanation of why you did what you did, or allowed what you allowed to happen in view of warning signs. We understand that this subject of eroding financial decision making capacity is not an area of comfort for most folks doing wealth management, financial planning or financial advising. We have done our research. The training you need is scarce and inadequate. We hope to change that very soon. We have extensive experience in aging and its effects. We will be offering you training materials through this site to increase your skill set in dealing with your aging investors. Your ability to anticipate what is coming with your older clients will greatly enhance your own safety and that of your clientele.
Policies Need To Change Policy changes are needed from the single advisor on your own to the wirehouse with hundreds of advisors serving clients. The industry cannot continue as it has in the past, with no firm guidance for those with clients who are losing capacity for financial decisions. The idea that you solve everything if you just escalate it is not going to do. There are too many compliance officers who lack guidance and a uniform way to address the issue. Besides policy change about how to deal with aging investors who are in mental decline, you will need training to implement policy. We offer that too. If you have a particular client issue right now, contact us at this site. We will start a Q & A section to address your concerns and to benefit others who may be in similar situations. We are here to offer you the benefit of our subject matter expertise with aging in our professions of nursing, law and psychology. Until next time, Carolyn Rosenblatt and Dr. Mikol Davis AgingInvestor.com