Do you consider yourself to be pretty good at managing your older clients?

Most of us may be overestimating what we know and underestimating what we need to know. By the year 2020 nearly one in six Americans will be sixty years old or older. And 10,000 people a day are turning seventy.

If you’re thinking “so what?” consider this: the risk of dementia and Alzheimer’s disease rises with age and the risk doubles about every five years once a person hits sixty-five. So you the advisor, the financial professional with responsibility about another’s finances will have to deal with the risk. Some of your clients are impaired now whether you recognize it or not, and many of you have several clients with some cognitive impairment.

Do you know what to look for with your older investors? Do you know the red flags? And if you spot those red flags, do you know what to do about them? There can be a long list of signs showing that a person is beginning a downhill slide with her thinking and understanding. Let’s just start with one sign most of us can recognize: short term memory loss.

The First Red Flag

Researchers who study these issues tell us that this is one of the very first signs other people see when the older client (or anyone) is starting to lose the capacity to make safe financial decisions. The client may entirely forget a conversation he had with you last week or even the same day. The client may forget her appointment with you or that she had a question she needed answered. By the time you get back to her with the answer, she doesn’t recall asking it. There are innumerable examples of this in our lives, as grandparents, other older relatives and friends start becoming forgetful. When it happens with clients, it is a red flag that warns you something is happening that needs your attention. Why?

The signs of forgetfulness can indicate that you need to track your client more closely than before. That means increasing the frequency of contact, especially in person if possible. Memory loss may lead to dementia, though this is not true in every case. However, memory loss is listed by the Alzheimer’s Association as an early warning sign of Alzheimer’s disease. Clients who have this disease should not be making financial decisions without the assistance of a trusted other. It is far too dangerous for them, as their judgment is impaired.

Documentation

No one will know what you see in your client unless you keep good records of your client contact and your observations. You need to label the changes you see in a uniform way, as should everyone else in your office. Call things by the same terms so everyone understands what is going on. “Short term memory loss” is a good example. This is a term that is in widespread use and typically understood by just about anyone. If you document that, and then see a client six months later, noting that the problem is worse than at the prior contact, you and those who may advise you about what to do will have something solid to work with in making decisions about that client. When you document, give specific examples, such as “client called repeatedly the same day asking the same questions”. And comment that he appeared to forget the previous conversations about that subject.

Then What?

After you have spotted such red flags as memory loss, you need a plan for escalation of the matter to someone who knows more about elder issues than you do. That needs to be a firm-wide or office policy. The decision-makers on the subject of what to do to keep an impaired client safer need to have a solid working knowledge of what steps they can take with you to help your client and protect your organization from costly mistakes.

Red flags of diminishing capacity are things every financial professional must learn and understand. We don’t cover the topic deeply in this article of course, but we do take a deeper dive in the book, Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices. You’ll find all you need to know in the chapter entitled “Know the Client Red Flags”. It comes with a checklist you can use as a guide on what to look for and the right terminology to document your observations correctly. If you want a “cheat sheet” with the red flags on it, just go to AgingInvestor.com and download your free checklist any time. You can get the book by clicking here.

By Carolyn Rosenblatt, RN, Attorney, & Dr. Mikol Davis, AgingInvestor.com

 

 

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