Aging Clients and Secrecy About Finances

Aging Clients and Secrecy About Finances

Jan 5, 2017 | aging, aging investor, diminished cognition, elder investor, finances for elders, power of attorney, senior investor, seniors finances

Have you ever had a stubborn older client who told you he'd never talk about his assets with anyone but you? He doesn't think he'll ever need help in his life and he wants to be in charge. When you suggest a family meeting to let someone else know what to do in case he ever became ill and unable to communicate, he shuts you down.   This is all too common.

A consistent obstacle to communication we see in our work is the resistance of the older person to discuss finances with anyone, including their adult children or other heirs. The Great Depression led to secrecy about finances for many, as fortunes were lost sometimes overnight and once proud people became impoverished. Talking openly about money was just not done for those who grew up in this time of widespread devastating and sometimes life-ending financial losses. To this segment of our population, openly discussing money was considered rude, unseemly. Some of these Depression-era survivors remain reluctant to tell anyone in their families where their accounts are, what their assets are and what they want done with their assets in the event of incapacity.

Presumably when you have a long-term relationship with your client, she trusts you and trusts your judgment. That gives you leverage. You may know more about her finances than her family, her friends or anyone in her life. You are charged with the task of long range planning and you look ahead. In doing so, it is up to you to urge your client, gently, repeatedly and with ongoing persistence that she find someone she can trust to appoint to protect her if she has an accident, falls ill, or can't speak for herself.

Sometimes persistence pays. The power of your relationship is a tool to persuade your client to come around. This is not a situation to ignore just because your client resists. The older she is, the more there is at risk. Anything can happen to her health at any time.

If your client resists, we encourage you to repeat your requesting a week or a month. Do it in a tactful way and paint a verbal picture for her of what would happen if she were no longer able to speak for herself. Tell her how frustrating it would be to have to refer her account to your legal department for a decision about getting a court involved if she could no longer communicate. Tell her how upset that would make you feel. Express your own concerns and make it your problem.

We hope that every single person in your book of business has an appointed trusted other for you to contact. You may well need that and it can be up to you to urge your client to take care of that most important piece of legal business, the Durable Power of Attorney, if she has not done this. Diminished capacity can sneak up on your client and you'll need help.

It's a new role you have with the oldest clients. They are living longer than they thought they would and with longevity come the risks of impairment in all ways.

If you'd like to take a little deeper dive into managing clients with diminished capacity, you can get a lot of expertise in a one hour online course by clicking here.

By Carolyn Rosenblatt, RN, Elder Law Attorney

AgingParents.com and AgingInvestor.com

Is Your Aging Client Being Seduced Away By Another Advisor?

Is Your Aging Client Being Seduced Away By Another Advisor?

Oct 13, 2016 | aging, aging investor, Alzheimer's disease, elder investor, financial elder abuse, investor, scammers, senior citizen investor, senior investor

Lots of sellers of products are trolling for new clients, new prospects and older investors with substantial assets. They use a proven technique that could trap your client.  You can educate your clients early and often about the technique, which is the “free meal educational seminar”.  These seminars are not, by themselves, a bad thing. Perhaps you’ve even put one on yourself, or considered doing so. But too many unethical people are using these to sell inappropriate investments to older people.  The annuity scams are notorious for this checker informative hints.

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Two Things Professionals Can Do About Elder Financial Abuse

Two Things Professionals Can Do About Elder Financial Abuse

Oct 7, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial advisors, financial elder abuse, handling money for seniors, investor, NASAA, senior investor, seniors finances

Two Things Professionals Can Do About Elder Financial Abuse

It's vicious and pervasive. It's growing. It has been called "the crime of the century". Elder financial abuse, according to a study by True Link Financial, costs seniors in the U.S. over $36B a year. But can financial professionals do anything about it? We say definitely yes.

Most of us have encountered this kind of opportunistic crime at some point, among family, neighbors or friends. When we at AgingInvestor.com present to groups of professionals we ask how many have had witnessed this kind of abuse with anyone known to them. Almost every hand goes up. The question is, what can you do about it?

Many professionals are either hesitant to get involved because they think privacy concerns should stop them, or they want to take action but are unsure about what to do. Let's clear away those concerns now.

First, remember that when your client gets ripped off and cash is drained out of the account you manage, you are losing fees for those AUM. If that isn't incentive enough to be involved note that NASAA has already developed model rules which will require that you report abuse to authorities. Those are likely to become mandates soon enough.

Let's look at two basic steps any professional can take now to improve your response and protect your clients from financial abuse.

Get third party contacts on file

One, you need to get from your retirement-age clients the names of several trusted others whom you can call in the event that you see red flags that abuse could be going on. Remember that family members are the most frequent abusers of aging folks. Perhaps that favorite one, Sonny Boy is taking advantage of a vulnerable parent or other relative. Be sure one of the contacts you get from your clients is not a family member, but a trusted friend, colleague or professional. Age makes all of us more vulnerable to financial manipulation for many reasons. Next time you review an older client's portfolio, get this necessary information about whom to call if you get concerned and keep it on record.

Get permission from your client to call the third parties under certain circumstances

Two, you need not consider privacy rules a barrier if you have your client's permission to contact the designated third parties he has identified. A legally sufficient privacy document will help you. This is an area where both legal and compliance departments should assist you to get the right paperwork in order. At AgingInvestor.com, we developed just such a model document, a product we offer to overcome the confidentiality barrier to taking action. It's part of a senior-specific policy. And you can do it in-house on your own too with legal input. Get one done for every aging client. It resolves the question of giving private information to the designated third party. You will have the ok to act when you need to.

Caution: we do not recommend that you use an informal letter to for your client to give up the right to privacy. Consider that in our society, we use things like a durable power of attorney to give up the right to solely manage one's finances, and an advance healthcare directive to give up the right to make end of life or care decisions alone. We don't use mere letters for these things. You need papers that are standardized, formal and that will stand up to scrutiny should anyone question them.

Surely you do not want predators to take advantage of your clients, particularly when they suffer from any cognitive decline. That increases their vulnerability. And the integrity of their portfolios is enhanced by your own vigilance over them as they get older.

Take a deeper dive into the elder abuse subject in our book Succeed With Senior Clients: A Financial Advisor's Guide to Best Practices. We offer you a handy checklist with the 7 warning signs of financial elder abuse, more practical tips and some true stories of how a financial professional did or didn't get involved at the right time.

The most forward thinking financial advisors will be early adopters of these means to keep clients financially safer. Be one of those leaders!

by Carolyn Rosenblatt, RN, Elder law attorney, AgingInvestor.com

Attention Financial Advisors: Do You Have A Colleague With Cognitive Impairment ?

Attention Financial Advisors: Do You Have A Colleague With Cognitive Impairment ?

Sep 22, 2016 | aging investor, elder investor, finances for elders, financial advisors, handling money for aging parents, handling money for seniors, investor, senior citizen investor, senior investor, seniors finances

Attention Financial Advisors:Do You Have A Colleague With Cognitive Impairment?

The financial services industry frequently shows concern about the problems of longevity and aging clients. Cognitive impairment, diminished capacity and dementia get air time with various solutions, mostly vague, offered by industry insiders. But one problem is not being addressed: the professional herself with cognitive impairment.

It's time to look at this as a real risk, not some unlikely possibility that can easily be taken care of by a succession plan for the professional's business. Dementia is a complicated disease. It sneaks up on people, with the early warning signs of short-term memory loss, followed by increasing difficulty with reasoning and judgment. If we had not witnessed this at AgingInvestor.com with impaired professionals ourselves, we might be fooled into thinking that professionals had figured out how to address it. Simply put, they haven't.

Let's look at the notion that all you need is a succession plan for your business and there will be no problem if you develop cognitive impairment yourself, or someone in your organization does. What's the flaw in this? It is that many people with early Alzheimer's or other dementia do not recognize that they are impaired. This phenomenon is called anosagnosia, an inability or refusal to recognize a defect or disorder that is clinically evident. Ironically, the part of the brain that reasons and analyzes is so affected by the disease that it is not able to process the information about one's own impairment.

How this plays out is that as a person ages and becomes more at risk for dementia, some will surely fall victim to brain disease. The odds are at least one in three by the time we reach age 85. The risk doubles about every 5 years starting at age 65. So some financial professionals are going to develop dementia and some will not know that they have any impairment. So they keep working. Others around them are afraid to raise the topic when alarming signs first appear. No protocol exists to ease a person out of the role to which they are accustomed, particularly when they tell you they're feeling just fine, thank you.

Busting The Myths

Myths exist. The first is that a financial professional, whether managing money for clients, selling products or addressing their taxes and accounting, will know that he or she needs to retire when the time comes. This is not what occurs. Many folks who have a good book of business and enjoy what they do will not look to retire by a certain age. They keep working, and consequently when they are impaired they put every client at risk.

Another myth is that somehow the doctor, the family or someone else will advise you when you have dementia and you will of course agree with their assessment. Denial is a frequent component of cognitive impairment, rooted deeply in fear of losing control over one's life. Even those who start to see and fear their own early difficulties with memory will cover it up, avoid facing it and carry on as if everything is fine. Even an annual physical checkup with the doctor is very unlikely to reveal the early warning signs of dementia unless the patient mentions cognitive problems to the examining doctor.

What Can Professionals Do?

As described in detail in Succeed With Senior Clients: A Financial Advisor's Guide to Best Practices, every organization needs a protocol to address the risk of diminished capacity in an impaired colleague. Few firms have a mandatory retirement age, but this option exists.

A protocol for advisors and others can look similar to the protocol every professional needs for aging clients. First, one needs a standardized way to spot the red flags of diminished capacity. Next, these must be regularly documented and contact with the potentially impaired client must increase. Third, a standard way to escalate the issue to knowledgeable others in the firm should exist. For clients who demonstrate the red flags, the organization must have a next step, which means contacting an appointed third party to become a surrogate decision maker. For professionals, a mandatory way to ease the person out of the job on a specific timeline should be in place, and this should become office policy.

It is time for every professional to look at the reality of the risk we all face with impaired cognition. It can happen to anyone. Your professional skill does not protect you from dementia. Wise planning for how you or your colleague would exit your job when you can't see why you need to must be on everyone's agenda.

By Carolyn Rosenblatt, RN, Attorney,  & Dr. Mikol Davis Geriatric Psychologist

AgingInvestor.com