Recently, we were invited to speak at the Buckingham Alliance annual conference where we gave the keynote address on the issues of managing aging clients. The average advisor has at least 7 clients right now with some form of cognitive impairment. Because of this, older clients often lack the ability to make safe financial decisions. This is why a change in the way advisors manage these clients must start now. We found that many conference attendees told us they were reluctant about bringing up the subject of their client's getting older and specifically when they had concerns about changes in their financial decision-making abilities. Most of us are conflict-averse when it comes to bringing up something like this that can be controversial.

With increasing longevity and its attendant risks, particularly of cognitive decline, it is imperative that advisors change the way business is done with the older client. Change isn’t easy for anyone. When advisors get used to doing things the way they've always done them, a shift can feel overwhelming. Most of us prefer to stick with what we know. If business is good, and no disasters have happened with the older folks in your book yet, you may think it’s ok just wait until "something happens" and then figure out what to do then.

Spoiler alert! "Something" is already happening! As people live longer and longer, we see more and more age-related brain changes, such as Alzheimer's disease or other forms of dementia. These changes in cognitive ability sneak up on you. The onset of dementia takes years in most cases. You might not even know what to look for. Don’t make the mistake of waiting until disaster strikes. Shouldn’t planning for the unexpected in all cases be a part of your job?

Here's the nitty-gritty: your clients are getting older and some of them, no matter how smart or accomplished, are going to be unable to make financial decisions. When they show signs of impairment, ignoring them and carrying on as if everything is fine is a dangerous risk. Here are some things that can happen if you don't take action.

You can get fired. If a family member of your clients tells you that the patriarch is making terrible decisions with money and money is being spent at a ridiculous rate, they may ask for your help. If you say, "I just manage the money" you will not look good. Adult children with the patriarch's power of attorney can and will get rid of you. This has really happened and with a HNW client's portfolio to boot.

You can be exposed to liability. You are supposed to know your client. That means you must be aware of things not being right with his decision-making. If you do nothing, thinking it's not your problem, an heir of that client could come after you because you failed to take any steps to keep your client financially safe. If the assets get drained, relatives will get angry. You must act reasonably. Doing nothing is unreasonable when you strongly suspect or know that a client is cognitively impaired.

Making basic changes in how you plan ahead for aging clients does not have to be extremely complicated. It does require that you identify all the clients over age 65, for example, and that you monitor them and their portfolios more often than you would younger clients. It requires that you learn what to look for when you think the older client is slipping. And it requires that you and your organization develop a clear path for escalation of a problem before financial abuse or other negative consequence happens.

If those in attendance at the conference went back to their offices and did just a few things differently than before, that is change. We hope raising the issues about older clients isn't just a conversation. More than thinking and talking is needed. We want you to ask yourself, "am I willing to change?" If you are and you need a start, use the free, downloadable checklist, The Ten Red Flags of Diminished Capacity so you can spot the warning signs. Those signs can be telling you, no more business as usual with this clients.