Jun 14, 2016 | aging, aging investor, financial elder abuse, senior citizen investor, senior investor
In his recent WSJ article, wealth advisor Paul Hynes raises this question. He points out that financial advisors are in a unique position to observe their clients over years, sometimes decades and they know their clients’ normal patterns and general life situations.
I am particularly interested in the subject and I agree with Mr. Hynes that advisors are well positioned to learn of changes in clients’ lives and to see red flags such as unusual activity in their accounts. He suggests that advisors should stay in communication with their clients’ families and that Adult Protective Services can be contacted if abuse is suspected. Here is where I question his advice as falling a bit short of what can be done.
As part of the national legal community dedicating time to the protection of vulnerable elders I see communications from lawyers all over the U.S. with complaints that Adult Protective Services are not taking financial elder abuse seriously enough in many places. When it is reported, APS may dismiss it as “a civil matter” in which they have no interest. APS is essentially an investigative help to the criminal justice system. It can intervene when an elder is in physical danger. Social workers and investigators from APS look into reports of abuse and help the DA determine whether there is evidence sufficient to prosecute a crime. If the matter involves the undue influence of a family member and the elder seems willing to give away money, even if duped into doing so, APS is unlikely to take any action.
Financial advisors must not rely on the idea that APS will protect their clients when abuse is suspected. Particularly in the case of family, close associates, and caregivers, APS may not wish to interfere unless or until an obvious crime has been committed. If is it not so obvious, it is up to others to take action to stop abuse. These others can include financial advisors, who may be in a highly trusted position with the elder. Advisors will see unusual withdrawals in the account or other signs of danger.
The financial services industry, generally, has avoided certain kinds of communication with family of aging investors due to privacy laws, concerns which they interpret as precluding them from sharing financial information. I do not agree that privacy should stop advisors from communication with family when an elder clearly needs protective action. There is a way around the privacy question. Policy can be created to obtain from every client a signed permission to communicate with a family member or trusted other appointed to step in when the advisor (and her compliance department or officer) has reasonably concluded that the elder is being taken advantage of financially or otherwise.
In his article, Paul Hynes suggests that wealth advisors should follow the notion “if you see something, say something” and I wholeheartedly agree. However, the industry needs to develop new, forward looking, senior specific policies to address what Hynes correctly points out as the rampant problem of elder abuse.
I’m doing my part to help by developing educational materials (Including books and online courses) for industry professionals to recognize the red flags warning of potential abuse, diminished financial capacity and how to get the necessary document in place around the issue of privacy by obtaining a client’s permission to communicate with others. Aging expertise from outside the financial services field is needed for all of these points. I hope everyone in the industry will pursue what FINRA (Financial Industry Regulatory Authority) has suggested since 2008: that advisors put senior-specific policies in place to assist them in stemming the rising tide of elder financial abuse of their own aging clients.
Until next time,
Carolyn Rosenblatt
AgingParents.com
Jun 14, 2016 | aging, aging investor, elder investor, finances for elders, senior investor
Industry regulators are always coming out with recommendations. And those have a way of eventually becoming mandates. When it comes to seniors, the regulators are very concerned about financial professionals keeping aging clients safer financially. We’re not talking about the DOL rule here. We’re talking about a lot of other recommendations they’ve made. One of these is increased communication with your older clients, 65+. What’s the big deal? These clients are more at risk of financial abuse from every direction. Regulators want you to do what you can to protect senior investors.
Here are two ways they suggest you do that.
First, increase the frequency of your communication with these older clients. That means reviewing their portfolios more often. It means calling or writing more often. It means paying attention to what is going on in their lives that may increase their risk of being manipulated financially.
Second, discuss with your clients the issues that affect seniors. One of these issues is the possibility of becoming impaired. You can present the idea in terms of having a stroke or heart attack. That’s a lot easier a concept for an older person to swallow than the idea of becoming cognitively impaired, everyone’s great fear. So you suggest that your client be sure to have an appointed agent on a durable power of attorney.
Another important piece of the picture of improved communication with aging clients is for you to encourage them to discuss their financial affairs with their heirs. You can be the catalyst in this process. Such discussions provide a forum for you to recommend that the client appoint a trusted other to serve as agent on a durable power of attorney document. Knowing that your client has done that essential thing, you have the potential to work with the appointed person in the event that your client becomes incapacitated for any reason, including dementia.
Without a DPOA, it is generally a messy legal problem for those who must take responsibility for an impaired elder. They may have to undertake the expense of seeking a guardianship in court to even have legal permission to make a bank withdrawal or sell a stock for the elder. If you know who the appointed person is, suggest a conversation with your client and that agent. Lay the groundwork for communication, should the need arise to have the DPOA step in at a later time and act on behalf of your client.
(Incidentally, from a legal point of view there should not be a conflict in appointments of the agent on a DPOA and an appointed successor trustee for the family trust. That begs for later fights. Encourage your client to consider this!)
We are touching on just a bit of what the SEC, FINRA and NASAA have jointly recommended for you and indeed urged you to consider in working with your aging clients. They want you do to business with this population in your book differently than the way it goes with younger clients.
You will absolutely benefit by being informed of what the regulatory agencies want from you when it comes to seniors. It is spelled out in some detail in our book, Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices. Check out the chapter “Pre-Emptive Strike: Hit the Aging Client Problem Before It Hits You“. Click HERE to get your book today. You will develop expertise you’ll appreciate soon.
By Carolyn Rosenblatt, RN, Elder law attorney, AgingInvestor.com
Mar 25, 2016 | aging, diminished cognition, elderly, finances for elders, financial capacity, financial elder abuse, scammers, senior citizen investor, senior investor
Can you think of anything that makes a person more desperate than being in pain? You can't stand it. Maybe you'll fall for anything that promises to end your pain.
My mother in law, Alice, at 92 was feeling like that. She had chronic knee pain that was getting worse. She went with some friends to a"free lunch seminars", always a vehicle for selling something.
This one was put on near a large retirement community. The place is full of fairly well to do elders, some quite wealthy. Nice target, right? The perpetrator in this situation was a chiropractor. He knew exactly what he was doing, promising to end everyone's chronic pain. All they had to do was sign up for his "guaranteed" to work pain relief program for a mere $3000 payable in advance and of course, nonrefundable. He carefully never put the guarantee in writing, but he used verbally it to seduce anyone there into believing his promise of pain relief.
Alice signed up. I advised her not to go through with his program and politely told her there were suspicious things I found in checking him out. She said she was ready to try anything and he assured her that everyone got good results. She went anyway.
The chiropractor in question didn't even see her. His assistant did the work, which involved very brief "treatment" and a very long pressured talk to try to get her to buy his expensive supplements which they now said would enable the treatment to work. As the scam became more obvious, Alice got disgusted. The "treatment" did nothing at all for her pain. She quit and asked for her money back. No dice.
With her permission we filed a complaint with the State Chiropractic Board. which prosecutes fraud and license violations through the state Attorney General. They pursued the chiropractor, eventually settling with him. He paid a fine and was probably placed on probation. Of course none of this gets Alice her money back. At last check he's still in business.
Pain relief is a big opportunity for scammers. They may be chiropractors or others who have some kind of license. They may be selling magic potions on the internet. It could start with one amount and escalate as it did with the chiropractor to expensive add ons, his "supplements".
Recent research shows that many seniors who get taken for relatively small amounts of money often become victims in escalating amounts over time. They want to trust when they feel desperate and that makes them vulnerable to manipulation.
What can you do as a professional if your client is victimized by a scam? Here are three things:
- If you learn about this sort of shady character, encourage your client to fight back. File a complaint. Write a letter to the entity in power. You can offer your help with paperwork or filling out a complaint form. Not every predator can be stopped but some can if you help your client take action.
- Warn other older clients. If you have aging clients, warn them by letter or email about any shady operators in your area. You never know who you might be saving by doing that.
- Make it public. If your client's story is useful and you get permission to share it, local newspapers, TV or radio stations may be interested in it. That's one way to educate and thwart these predators.
Do you have an experience of seeing a client get taken advantage of by a shady character like the chiropractor here? We'd like to hear from you. Your colleagues can also learn from you. We invite you to send us your stories. Please email me: carolyn@aginginvestor.com.
Mar 25, 2016 | aging, aging investor, Alzheimer's disease, diminished cognition, elder investor, elderly, finances for elders, financial capacity, financial elder abuse, handling money for aging parents, handling money for seniors, investor, senior citizen investor, senior investor, seniors finances
Have you ever wondered about one of your
own client’s capacity for making financial decisions? Professionals who directly or indirectly sell services and products to aging people may not be clear about financial capacity. It is indeed a complex thing, and one should not underestimate how difficult it can be to make a determination about whether a client is impaired. Does the client seem “out of it” sometimes? Forgetful? Is he acting strangely? Maybe you just dismissed it if you noticed those things. You may have thought, “he’s just getting old”. Maybe you didn’t think it was any big deal. But was it? Diminished capacity may not be obvious at all. Small warning signs can be missed. And every warning sign is a clue. The clues can mount up and paint a picture. You need to be able to see it. And first you need to know what to look for in your aging clients. How do you decide whether someone has diminished capacity for financial decisions? Ultimately, the question of capacity is a
legal decision, aided by lawyers, medical professionals and sometimes by judges. And lawyers also have a difficult time seeing the grey areas and the nuances of thinking that comprise financial decision-making abilities. One thing every professional working with seniors should know are the warning signs of dementia. If you see enough of these warning signs, your client is likely to be impaired in her financial judgment Excellent information for the public is available on the Alzheimer’s Association website at
alz.org. Memory loss is often the first sign of dementia. There is a difference between memory loss a non-demented person experiences and the memory loss that evolves in to dementia. As an example, forgetting a person’s name is common and we usually remember the name later. (Does this ever happen to you, “it’s on the tip of my tongue, but I can’t remember right now”?) People who are developing dementia don’t remember these things later. Their short term memory is eroding steadily. They forget what was said in the middle of a sentence. They forget appointments. They don’t remember that you spoke with them yesterday.
Confusion is another sign. They may forget where they are going or get lost. They may exhibit unusual behavior from what is normal for them. These are the kinds of things that tip you off that a cognitive problem is looming. A person who shows you these signs may be impaired for making safe financial decisions. Beware of drawing general conclusions about dementia or Alzheimer's Disease from a single case with which you may have personal experience. If your client is not doing what your grandmother with Alzheimer's did, you can't be certain that your client does not have dementia. Have you as a financial professional had any personal experience with dementia in a family member or client? Let us know about what you did to handle the issues affecting so many. We welcome your input.
Need a quick checklist to use to identify the 10 red flags of diminished capacity in your clients? Get yours now by clicking below. It's free. Click here to get your free downloadable Checklist "The 10 Red Flags of Diminished Capacity" Dr. Mikol Davis & Carolyn Rosenblatt, R.N., Elder Law Attorney
Mar 25, 2016 | aging, aging investor, elder investor, elderly, finances for elders, financial capacity, handling money for aging parents, scammers, senior citizen investor, senior investor, seniors finances
Do you have any clients over age 65? They may not know about: the grandma scam. Although the government, local agencies and sometimes the media publicize these predatory traps for elders, somehow the word doesn’t get around fast or far enough. Here at AgingInvestor.com, we work with a lot of families who have elders and we’ve been sounding the alarm since 2007 on this one. But it persists. Intelligent people, doctors, lawyers, professionals and non professionals alike are being victimized. Anyone can be caught off guard.
Here’s how the grandma scam works –
A call from a young person is made to the targeted older person, often at night, after the aging person is asleep. Half awake, grandma answers the phone. ”It’s me, Grandma” the caller says. Grandma immediately falls into the trap and says “Michael, is that you?” Or any grandchild who is named instantly becomes the identity of the caller. ”Yes, it’s Michael” the scammer says quickly. He then says he’s in trouble in some named city far away or even a foreign country. He’s lost his passport, or been arrested, he’s in the hospital, he’s very sick, or some concocted tale of needing help desperately. There is pain in his voice. He says how much he loves his Grandma and please don’t tell his parents. He needs money right away for the bill or for a laywer to get him out of jail or to get a new passport, etc. Would Grandma please wire the money? The targeted victim has to act right away. But repeatedly, older gullible people are swayed by the feeling of wanting to help a grandchild in need. And they don’t take time to think.
Grandma is so concerned, she gets that cash wired to the scammer right away. She doesn’t check anything out and she doesn’t call her son or daughter, the parents of the fake grandchild. It takes a while before she realizes she’s been had. Millions of dollars are lost this way, in smaller amounts at a time. No matter how much the press reports this kind of scam, the thieves keep at it, as they know that about one in fifty calls will result in getting money from an unsuspecting person.
Why are these con artists getting away with it? Dialing for dollars all day is quicker and easier than robbing a bank and it gets better results. The con artists rarely get caught. The money, once wired, is gone forever from the victim. And due to shame and embarrassment, victims rarely report the scam artists to the police. Con men buy names from subscription lists with likely senior citizen readers or from other information brokers. Some have the ages of their targets and their addresses. Sometimes the more sophisticated ones have even researched the names of family members, so calling Grandma is more likely to sound credible. If the caller’s voice isn’t recognizable, there is always an excuse: I have a cold, I’m really sick, or anything that works to persuade Grandma it’s really her grandson.
What’s the takeaway?
Your client can be easily tricked under the right circumstances. Wanting a call from grandkids is the starting point for scammers. It triggers an emotional response to the plea for help. “I love you” is something the grandparent wants to hear and the emotional hook is the basis of the con man’s success. Warn every aging client to be aware of the scam and to ask the caller a question only a real grandchild would know: the name of a pet, a parent’s birth date or a nickname.
Financial professionals are in a unique position to educate clients about finances and how to keep from losing money. Thwarting abuse is so important! Have you ever had a client get scammed? Have you seen ripoffs from their own family members? We’d like to hear your perspective on this. Comments welcome.
Learn what you can do about elder abuse at AgingInvestor.com in a one hour accredited course. Check it out here.
