Feb 3, 2015 | aging, aging investor, Alzheimer's disease, diminished cognition, elder investor, elderly, financial elder abuse, senior investor
Prior studies put the extent of financial elder abuse at $2.9 billion a year. A recent study finds that the actual amount stolen from elders is $36.48 billion a year. It’s no wonder that some call financial abuse “the crime of the century”. And yet, too many financial professionals see the warning signs and don’t know what to do or think that privacy concerns prevent them from doing anything.
I hope I can change your mind about the privacy issue. It should not stop you from doing the right thing.
According to the report of this recent study by True Link, a financial services company, the design of this survey was guided by recommendations of an expert panel of fraud researchers convened by the Financial Fraud Research Center at the Stanford Center on Longevity. That gives it credibility. No one has yet commented on any flaws in the study and I cannot say if there were any specific shortcomings, but the figure of over $36 billion is indeed startling.
Some of the most surprising study conclusions are that seniors who are younger, urban, and college-educated lose more money than those who are not. That somewhat defies the stereotype in other research suggesting that the isolated, lonely and unsophisticated senior would be the most vulnerable to loss. Another surprising finding is that legal but misleading tactics used to get a senior’s permission to take money from them leads to losses of $16.99 billion per year. The senior may be tricked into giving consent to credit card charges, for example and not realize how deeply or how long that consent ends up costing them.
So it’s not just the unsophisticated investor who gets taken by scammers. It can easily be your well educated client who thinks he knows more than you do and takes very foolish risks because he feels so capable of making decisions. Maybe he is impaired and doesn’t know it.
Or she gets sucked into long term contracts for things she doesn’t want or need. Once she gives approval for a credit card charge, she may be stuck with it. The study shows that people who start out losing a little each year tend to suffer increasing losses over time. A $20 a year loss can turn into a $2000 a year bilking and so on.
One thing every financial professional can do now is to develop a privacy waiver document specific to your organization or your management as an independent advisor that allows you to contact a trusted other whom your client has chosen, in the event that you see some red flags suggesting elder financial abuse.
If you’re unsure about what will give you a legally appropriate form for doing this, we can help you create one at AgingInvestor.com. Education and prevention of elder abuse are our mission. Everyone’s take on privacy may be different, but one thing is clear: you can’t continue to hide behind privacy as an excuse for doing nothing while your very own clients may be victims. Anything from telemarketer scams to undue influence by family to abuse by slick and unscrupulous salesmen of financial products that exploit older investors are everywhere around you.
One thing the study doesn’t explain directly is that it is also up to families to monitor their loved ones. True Link offers a product that allows monitoring of all an individual’s accounts in one place. Great, but what if the aging person won’t let family have access to the account information? That is a major issue. If you, as an advisor want to get involved, you can work with your client early enough that you have a clear policy in place when the time comes that your suspicions of abuse are raised. With a privacy waiver, you have the right to contact family or the person your client appointed to get the ball rolling on stopping abuse.
Caring and honest family need your help as a trusted professional to keep them alerted to any signs of trouble with an elder’s judgment about financial decisions. Some families are scattered all over and they may not have contact with your client about finances. You may not be able single-highhandedly to wipe out every abuse problem, but it seems clear that if you develop a clear policy for reporting danger signs and your suspicions of abuse, you can change the status quo.
You can sharpen your knowledge of an aging client and their financial capacity by completing one of our 6 C.E.
courses at AgingInvestor.com. Try the one on
understanding the signs of diminished capacity. Sign up today and get an hour of CFB accredited continuing education. Click
HERE.
Until next time,
Carolyn Rosenblatt, RN, Attorney
AgingInvestor.com and AgingParents.com
Jan 25, 2015 | aging, elderly, medicare
Carolyn Rosenblatt, R.N., Elder Law Attorney, Forbes Blogger, easily breaks down the benefits for Seniors since the ACA became law. Ms. Rosenblatt also describes and the most important benefit that got left out of Obama Care.
Dec 19, 2014 | aging, aging investor, diminished cognition, elder investor, elderly, financial elder abuse, investor, scammers
When your aging client has contact with you, consider it an opportunity to educate them about more than the status of their portfolio you manage. Your client’s efforts to maintain financial safety can be thwarted by clever scammers who are constantly devising new ways to take advantage of them. You are in a perfect position to help keep them informed about financial abuse and the latest information on tactics scammers use. Don’t make it someone else’s problem. Make it part of your services.
Take for example the “grandma I need help” scam. My 92 year old mother in law told me about this one. Someone actually had the nerve to try it with her, but she’s smarter than they were and it didn’t work. However, one of her friends did fall into the trap. Somehow the scammers got a list of phone numbers of many of the seniors living in the nicely appointed neighborhood in her retirement community. They get a young man to call from their list of numbers and say “Grandma?” when a woman answers. If she thinks it’s her grandson, she’s bait. The thief then says he’s in trouble, with some made-up some story to get her to worry about him. He then asks her to wire money right away to get him out of this jam. The unsuspecting do it. And get taken.
A newer scam is the gift basket trick. Again, the older person’s phone number and address are known to the thieves. They call the potential victim to be sure he’s home and then tell him they’re Express Courier or any other name and they have a gift delivery. Will he be home in the next hour? If the victim says “yes, I’ll be here” an official looking truck with a courier name on it pulls up within the hour, and the delivery man hands the victim a lovely basket of wine and flowers. The trap is in the delivery man then asking the victim for payment for a “delivery fee’’ because the basket has alcohol and had to be hand delivered to an adult rather than left on the doorstep. Or so they say. The fake courier insists on a credit card payment rather than cash, even if the fee is just $3.50. He uses a small portable credit card scanner and asks for the PIN number for any debit card. What the victim does not know is that the scanner is a device used to steal the credit card information, in the way this kind of information has been stolen from ATMs and gas station credit card machines in the past. The scanner the courier uses even prints out a nice little receipt, making it all the more believable.
The victim doesn’t realize his credit card information has been used to make a dummy credit card with his name on it, which the thieves quickly use until the victim cancels the card. Thousands of dollars can be stolen from the victim’s by ATM cash withdrawals and numerous purchases before the victim knows what is going on. People are getting tricked by this. The scam is working for the scammers and you know they will keep doing it until the public gets well informed enough to decline the offer of the fake gift delivery over the phone.
If you are managing accounts for older clients, take the opportunity to help educate them about these nasty fraudsters who are easily able to get their names and phone numbers. You can make a difference. Tell them in person or make a handout about scams to email or send to them. They may see you as protective of their financial safety in more ways than one. That can uplift your image, always a good thing. We’ll keep you informed about elder abuse and how to protect your aging clients right here at
AgingInvestor.com.
Until next time,
Carolyn Rosenblatt, RN, Attorney
Nov 22, 2014 | aging, aging investor, Alzheimer's disease, diminished cognition, elder investor, elderly, financial elder abuse, investor, senior citizen investor, senior investor
We know that abuse of seniors is a growing problem. Based on information from the National Center on Elder Abuse, the majority of abusers are family members. However, only 44 out of 1000 instances of abuse are reported to authorities. Why aren’t more cases reported to the very authorities capable of stopping the abusers?
It seems to me that most family members are simply unwilling to “rat out” another family member even when they know that abuse is going on. When it comes to the seniors themselves, there is shame and embarrassment associated with being taken advantage of by someone close, especially someone they surely trusted. There is hesitation and fear. They want to talk about it but not do anything about it. The reluctance to report the abuse to Adult Protective Services is not limited to the seniors who can’t bear to call the authorities about a son, daughter or other relative.
I recently received a call from a distressed sister of a brother that she was convinced was stealing from their parents. He had total control over their parents, one of whom had dementia. His parents had appointed him as the agent on both the Durable Power of Attorney and the Advance Healthcare Directive. This gave him the legal authority to make both financial decisions without being accountable to anyone else and all healthcare decisions as well. I listened patiently to all the reasons she thought her brother was taking her parents’ money and using it for himself. I asked her if she had called Adult Protective Services.” No”, she said. When I asked why not she said “I don’t want to get my brother in trouble”. Where is the logic in that?
In another case, the elder herself had called. “I gave my grandson a big loan and he hasn’t paid it back,” she said. “But now I need the money to live on”. She described how her favorite grandson had taken title to her mobile home and gotten a loan, even after she had “loaned” him most of her savings. I explained that her chances of getting paid back were probably not very good, but the least she could do was to report what had happened to authorities. I advised her that taking a “loan” from an 80 year old and not paying it back would likely be considered elder abuse and it should be reported to APS. “Would my grandson go to jail?” she asked. I told her I didn’t know but it can happen when someone has committed this crime of elder abuse. She said, “I don’t want my grandson to go to jail”. Unfortunately, I am sure she did not follow up or do anything more about the problem.
Seniors like the 80-year-old woman are typical of why elder abuse does not get reported and therefore prosecuted more often, even when a family member is well aware of what is going on and knows that it is wrong. They would rather suffer impoverishment than be the one to report abuse. In fact, these same victims may refuse to testify against a relative who has abused them, even when these cases are prosecuted. Charges may not stick when the victim is unwilling to testify, unless there are independent records to prove the case in court.
It is as much a problem of our emotions and fears as it is of the wrongdoing itself. We somehow justify the actions, we look the other way or we fear what justice will do to our abusive relative.
I wonder, where is the anger at a crime against a person who is easily taken advantage of by the abuser? Where is the advocacy for the vulnerable person who is also our relative? Why are we remaining silent in this growing, $2.9 billion dollar a year problem?
I would be willing to guess that there is someone reading this whose client has a financial abuser in a their family or knows of a family where this has taken place. I urge you to speak up. To my knowledge, you can remain anonymous in your reporting, just as you can with any crime. Whether or not the criminal justice system can prove the crime is not your problem. It is your problem to carry the knowledge of financial abuse with you and to do nothing to protect the elder. One day it could be you who is victimized.
We are all encountering an aging population and the crime of opportunity of abusing elders is not going away. I am hopeful that we will show enough concern, enough responsibility and enough guts to do the right thing when we see a wrong that needs our attention.
![Aging Clients: How Financial Advisors Can Succeed in Difficult Conversations]()
Nov 4, 2014 | aging, aging investor, elder investor, elderly, financial elder abuse, senior investor
Financial advisors can protect their clients from financial ruin – and their financial firms from legal and compliance risk
Four critical things a smart and ethical financial advisor can do to make the client’s transition of power more likely to succeed
By Marie Swift for Guidevine.com
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It’s a fact of life. None of us are getting any younger. Life marches on and cognitive disabilities can set in. Financial advisors can spot dementia if properly trained. In addition, they can stop their older clients from harming themselves financially – and from claiming the advisor (or others close them in their personal life) had something to do with their undoing.
The legal and compliance risks to an advisor’s practice are very real. Forward-thinking advisors will ramp up their skills now.
Here are some tips from Carolyn L. Rosenblatt and Dr. Mikol Davis who together develop educational materials for financial advisors and speak at financial services industry conferences in a attempt to reduce elder abuse, and to also reduce legal / compliance risks for financial advisory firms and allied institutions. Rosenblatt is an RN, an attorney and a consultant on aging issues. Dr. Davis is a licensed, clinical psychologist with thirty-seven years of experience in the mental health field. More information about their work can be found at AgingInvestor.com and AgingParents.com.
WHAT TO DO IN THE EVENT OF THE CLIENT’S COGNITIVE DECLINE
Financial advisors may notice the warning signs ofcognitive decline in a client for some time. When they conclude that their aging client is getting to the point when he or she is unable to safely manage financial decisions any longer, the time will come when someone must take over for the client. Typically a responsible client has an estate plan and someone is appointed as the client’s successor.
One important step for the advisor is to find out if the client has indeed created an estate plan with a provision for a successor. It may be a successor trustee for a family trust or it may be an agent on a Durable Power of Attorney. Sometimes, for many reasons, even otherwise responsible people just don’t get their estate planning done. If the client has not accomplished the estate planing needed, this is a step the advisor can take that will protect both the client and the advisory firm. The advisor, with the help of their legal and compliance department can develop an institution-specific document that allows the client to appoint the appropriate successor to take his or her place for management decisions over the funds the advisor controls and to waive his or her right to privacy with that appointed agent. This is essential. The advisor can’t do the job of protecting the client without it.
Once the advisor is informed about the agent the client has appointed to take the reins in the event of his or her incapacity, the advisor needs to take the initiative for the next steps.
FOUR CRITICAL THINGS TO DO WHEN A TRANSITION OF POWER IS NEAR
Here are four critical things a smart and ethical financial advisor can do to make the transition more likely to succeed:
- Recognize and acknowledge that this transition of power is difficult for anyone.
“If the client, whom you may have known over decades, has been a powerful person in his or her life, and has been “the boss” in one way or another, giving up the status and position of being in charge will never be easy. Let the client know that you understand this,” said Rosenblatt.
“Communicate that your effort is to protect his hard work and the prudent decisions he has made over the time you have known him,” said Dr. Davis. “This acknowledgement lets him know that you respect that this is emotionally trying for him. The trust he has in you will help you both.”
- Set up a face-to-face meeting, if possible, with your client and his or her successor.
“The time should be chosen carefully,” warns Dr. Davis. “Be sure that there are no immediately stressful life events going on with your client that might distract from the importance of the meeting. An illness, loss of a spouse or family member, a divorce or other traumatic incident will absorb your client’s attention and could interfere with your effort to succeed.”
“Find out how your client is doing in general, and select the right time accordingly,” underscores Rosenblatt.
- Choose the place for a meeting carefully.
“Your aging client is already dealing with loss of control, probably in more ways than financially,” Rosenblatt continued. “If you have observed obvious changes in your client over time, there are likely other parts of his life that are a problem too.”
“Let him choose where to meet. Do what you can to ensure that he is comfortable and that there is privacy. Encourage him to tell you about his concerns and fears in arranging the meeting. Be an excellent listener,” advises Dr. Davis.
- Expect resistance and do advance planning on how to manage it.
“No one wants to think of herself as being too old to do what she has always done,” Rosenblatt said.
“No one will relish the idea of a difficult meeting in which she must acknowledge that she has to yield control over finances,” echoes Dr. Davis. “Vulnerability is the result.”
“If your client pushes back at the suggestion of a meeting, let her know that you understand why she might not want to have it but that it is going to be necessary, and soon. Set a date for follow up. Don’t push too hard, but gently persist,” Rosenblatt emphasized.
IN CONCLUSION
Aging clients will very likely need someone to assist with financial management eventually. This is something to plan for as an expected development, rather than a “maybe” or unlikely possibility. Financial advisors who are prepared for how to handle the potential transition of control can help to ensure their clients are protected from dangerous money decisions that arise from cognitive impairment. Astute financial advisors will be prepared to manage any transition as gracefully as possible.
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