Can Brain Images Tell You If Your Aging Client Can’t Handle Money Any More?

Can Brain Images Tell You If Your Aging Client Can’t Handle Money Any More?

Aug 3, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial capacity, handling money for aging parents, handling money for seniors, senior citizen investor, senior investor, seniors finances

The National Institute on Aging reports that scientists are using magnetic resonance imaging (MRI) of the brain to explore the parts associated with money managing abilities. Can we actually see a picture of this?

The report cites neuropsychologist and lawyer, Dr. Marson. “It’s the $18.1 trillion problem,” said Daniel Marson, J.D., Ph.D., professor of neurology at the University of Alabama at Birmingham, citing an estimate of household wealth held by U.S. adults age 65 and older. “That money is at risk in part because of the cognitive disorders of aging.”

We don't have a way to pinpoint an exact spot in the brain that would tell us that a person is or is not competent with finances, but the report describes novel efforts using MRIs to find out more than ever about the brain and financial capacity. Changes in certain parts of the brain are linked to loss of financial capacity.

New techniques are providing intriguing data on why older adults—even those who were previously quite savvy about finances—may lose their money-managing abilities,” said Nina Silverberg, Ph.D., program director of the Alzheimer’s Disease Centers at NIA’s Division of Neuroscience.

What does this mean for you and your aging client?  It may be one more objective way to verify what you already suspect: that an older client is not savvy anymore when it comes to handling finances. The trick would be persuading a client to get this brain image if you and the family suspect that the client is in cognitive decline. We don't have the MRI techniques nailed down to verify loss of money making decisions, but that seems to be on the horizon.

Meanwhile, every advisor needs to be aware of the subtle signs of impairment in your client. An aging client who is in the earliest stages of Alzheimer's for example, is already moderately impaired for making safe money decisions. That means that you, a responsible advisor have in place a clear path to bringing in a surrogate decision maker to help that client. Part of that $1.8 trillion Dr. Marson mentions as being at risk is what is paying your fees. Take prudent steps to protect it.

Learn fast about spotting diminished capacity with our downloadable free checklist at AgingInvestor.com.

 

Watch For The 6 Warning Signs of Diminished Financial Capacity

Watch For The 6 Warning Signs of Diminished Financial Capacity

Jun 18, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, financial capacity, senior investor

Most of us probably think we know what to look for in an aging client who has diminished capacity. But have you every studied the subtle signs that should serve as red flags for you?  Now is the time to learn more.  Too many older clients are among us to ignore the probability that some of them will be too impaired to do business safely.
Indicators of diminished capacity will not always be so obvious to you, particularly if you are interacting with a an aging client and you as a professional are doing most of the talking.  You are probably directing the conversation with that client If you have specific questions about a transaction, whether it involves a real estate matter, a legal transaction or case or accounting matter.  You could miss the signs that your client is beginning to develop cognitive problems.  If you are asking your client, “Do you understand?” and he says “yes” that is not a way to test whether he really did understand or not.  You will need to do more if any warning sign pops up when you interact with your client.

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Can You Prevent Your Aging Clients From Being Victimized?

Can You Prevent Your Aging Clients From Being Victimized?

Jun 17, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, financial capacity, financial elder abuse, senior investor

Your elderly clients are exactly what professional thieves are looking for. They know, from the massive success they’ve had in stealing from elders, that age is the biggest risk elders have that can affect their money judgment.

But as a professional, is it really your business to keep them safe from outside predators?  It’s one thing if the person taking advantage is in your own organization or office. That puts an obvious burden on you to act. But it’s the subtle things that you learn from your client about losing money to someone that should get your attention too.

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Why You Need To Act When Your Client Has Serious Memory Problems

Why You Need To Act When Your Client Has Serious Memory Problems

Jun 17, 2016 | aging, diminished cognition, elderly, financial capacity

Have you ever found yourself in a situation with an older client who can't seem to remember anything anymore. You may have known the client over a number of years and feel responsible. But you are at a loss now. What are you supposed to do with this client? He's pleasant and just loves you. But you are worried.

You are pretty sure your client is experiencing a slow, but steady cognitive decline. He has a daughter in another state but maybe she isn't paying attention to what is going on. He has a son she's not close to, though he lives in the same area she does. You asked him once if he had someone to be his agent, his power of attorney. He hadn't gotten around to that yet.

No one acts. No one insists that your client choose a relative or friend and sign the Durable Power of Attorney document. He says he doesn't want to talk about it and you just back off and never mention it again. You suspect he may have Alzheimer's disease, from your experience with your own family member.

Here is what can happen to your client.

He steadily loses judgment about what is a good thing to spend money on or invest in; therefore, bad decisions happen. We have observed clients who were once financially comfortable start falling for obvious scams. They buy worthless coins or stamps or fly-by-night property investments that take their money and disappear. Perhaps no one knows because the elder is in the secrecy habit. Time passes and the client's cognitive ability declines even more. There is no stopping dementia caused by Alzheimer's disease.   The predators find an easy mark. As long as there is cash to spend or credit cards to run up, the elder keeps getting into deeper and deeper trouble. Unquestionably, financial decimation can result.

These situations are real. We have talked to the families of elders who have probably been impaired for years, hearing them say they wished someone had done something sooner. No one but the financial professional knew what the client had nor where his money was going. The family thought the elder's finances were fine. Now, with too much drained out by excessive giving, the family may well end up having to support their aging relative just at the time when extensive care is needed and the expense of it skyrockets.

How do you prevent the worst? By engaging in discussion with your client's family or appointed other early in your relationship. If you have an ongoing connection with that trusted person in your client's life, you stand a better chance of protecting her from dumb and destructive decisions if her mind starts to go, later on in life. Even if you can't imagine how a perfectly alert, intelligent person could get dementia, it happens to millions of people as they live longer. The risk rises with age.

If you have never had conversations with your older clients' families now is the time to start. You need to educate your client about the importance of having someone else named by her for you to reach out to if she gets sick or has an accident.

You need to develop the skill of conducting family meetings while each client is fully competent. Even if a client has a few memory lapses now it is not too late to have a meeting with family to figure out the path forward in case of trouble ahead. This is a "soft skill" every advisor needs. If you want to learn how to conduct a family meeting or get better at this, you can learn the techniques in an hour.

Putting these skills to work takes some practice. It is especially important to know what to do when a client's family is difficult, or there is a history of conflict among them. That's tricky and you will need some outside help. Get smarter about conducting successful family meetings in our new book, Succeed With Senior Clients: A Financial Advisor's Guide to Best Practices. There's a great chapter entitled "Your Client's Family: An Open Book or Pandora's Box?" Click HERE for your copy today!

The Art of Communication With Aging Clients

The Art of Communication With Aging Clients

Jun 17, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial capacity, investor, senior investor, seniors finances

Have you ever had an older client who didn’t want anyone, not even family, to know what his assets were? Did you find this secrecy about money to be a problem with a few of these older folks? It’s not so rare.

Everyone is entitled to privacy, of course, and the rules mandate that you not share a person’s private financial information. But what if your client begins to decline in his health? What if he starts to appear as if he’s “losing it”? Then are you supposed to just let him make mistakes and feel constrained that you can’t call a family member or anyone about his health? It does seem that most advisors do nothing until things reach a crisis point.

As aging experts, we think things should be handled differently. When you open every client file, you are not required to get the name of someone to call in case of emergency or in case of need. That is precisely what needs to change. Let’s consider common sense. If people are living longer than ever, their chances of developing cognitive impairment are consequently greater. With impairment, people lose their financial judgment. If you have a client’s trusted contact in the file, you may need it. And you can’t wait until your client is really, obviously impaired. If you do, she probably won’t want to give you anything. That puts you in a bad position. Your client is vulnerable to big mistakes and even to financial abuse. You don’t know what to do. You can’t call anyone and you wouldn’t know who to call even if you could.

Here’s the sensible solution: get the names and contact information of two trusted others for your client when you open any file. And with existing clients, ask them for the contact for two trusted people in their lives at the next portfolio review. Do it across the board for every single client. That way, when any one of them goes on to develop cognitive impairment, or dementia or has a stroke or anything disabling, you are not caught flat.   And how do you ask that secretive client for the names and for permission to call when, in your judgment, the need arises? You start by making it your problem. You let the client know that it is now office policy. You politely insist and you get it done.

Not every single client will immediately cooperate. Some will need your patient persuasion and tact to coax them to do this. That is one of those “soft skills‘ you absolutely need with your older clients. A few may refuse your request and you can’t force it on them. But for most clients, the encouragement from you to look to the future may be considered part of your job.

Senior clients can pose a number of communication issues with you besides being secretive about finances. Hearing loss, vision limitations and mobility issues can all make conversation more difficult. What you need to know to hone your skills and keep on top of these challenges is all spelled out for you in our book, Succeed With Senior Clients, A Financial Advisor’s Guide to Best Practices. Check out the chapter, “Tough Talk: Communication Challenges With Aging Clients”. You’ll get those soft skills down in no time! Get your copy today by clicking HERE.