Mar 25, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial capacity, financial elder abuse, handling money for aging parents, handling money for seniors, investor, scammers, senior citizen investor, senior investor, seniors finances
There is something about memory loss that should raise a red flag when it comes to your aging clients and their investments. Are you prepared?
By 2030, there will be 72.1 million people in the U.S. over age 65, or “elders”. 7.7 million of them will have Alzheimer’s Disease (AD). This directly translates to a large number of impaired clients making or attempting to make financial transactions and decisions. Some of those transactions could be with you.
According to respected researcher, attorney and neuropsychologist at the University of Alabama, Burmingham, Dr. Daniel Marson, losing capacity for financial decisions is something we need to be ready for, as it affects a huge part of our population. The problem is growing. Financial institutions, organizations and banks need to take preventive steps to avoid financial losses and exploitation of their clients.
What are the implications for the financial services industry? Demographics and dementia demonstrate that policies need to change and institutions need to explicitly plan for diminished financial capacity in their investors. We’re not just talking about escalating a matter to compliance when a client seems to be behaving oddly. We are suggesting that institutions and organizations get over the brick wall excuse that it’s not their problem, it’s the family’s problem. Financial professionals need to change the thinking that privacy concerns prevent them at all times from doing anything unless the client gives permission. A client who is impaired for decision-making may not be willing or able to give permission for you to discuss a problem with family until it is too late. Getting permission needs to be a proactive mandate.
Privacy does not have to be a problem if your organization, institution, or you, as an individual plan for the possibility of diminished capacity as a part of all investment transactions. That planning will include obtaining a special authorization for the financial services professional to contact a designated person when certain criteria are met. That, of course, means thinking through, with the input of aging experts, the criteria that would trigger the use of the special authorization.
Further, one should develop an agreed upon plan of action for the financial professional when the criteria that demonstrate diminished capacity are identified. This will take collaboration among all the players in institutions, so that policy development is uniform, regulation-compliant, and fair to the aging person who may be developing impairment.
Most importantly, a secure path of communication and action for the institution needs to be in place. No one with a questionable aging client should be left wondering:
Should I escalate this to compliance now, or does it take more?
Do I have the authority to contact a family member, or does that violate my client’s privacy and the laws about privacy?
What steps should I take now to protect myself?
Clients with memory loss are likely going to become impaired for making financial decisions at some point. Do you want to lose the assets under your management because your aging investor can’t figure out what you are saying and can’t approve what you need to do to protect him from disaster? We see an absolute connection, based on very solid research, between the dangerous red flag of memory loss and financial loss.
If you have heard the term “sliver tsunami” you may know that it refers to the massive wave of aging folks in our population. In case you haven’t noticed, it has already hit and your feet are getting wet.
Get a one page checklist you can use to identify ten signs of diminished capacity by clicking HERE. Be ready for aging clients and know what to do!
Jan 16, 2016 | aging, aging investor, Alzheimer's disease, diminished cognition, elder investor, elderly, financial capacity, investor, senior citizen investor, senior investor, the gray zone
“Best Practices For Managing Clients With Diminished Capacity”
Summary of course:
Our population is living longer than ever. The risk of dementia rises with age. That means that most of us are going to encounter problems of aging in our clients.
We need to recognize the red flags of impairment that will affect financial capacity. These include:
- Cognitive signs, such as memory loss and difficulty understanding the conversation
- Communication, calculations and orientation problems
- Emotional signs that are out of character for your client.
It is essential for every financial professional to understand the complexity of financial capacity and appreciate how many parts it has. There are 9 domains of financial capacity. You cannot determine if a person is impaired or not just by talking on the phone with her or having a brief meeting in which you give information.
A normal social conversation with the client is not a measure of whether or not the client has diminished financial capacity.
The more aware you are as a professional, the better chance you have of protecting your client from loss and protecting yourself as well.
Learning objectives:
- Prepare yourself for the wave of aging clients by understanding the demographics of our aging population and the risks of dementia associated with aging.
- Understand the 9 domains of financial capacity and learn how to spot problems with any one of them.
- Be able to identify red flags of impaired cognition that should prompt you to act.
- Develop a personal plan for what to do when you see warning signs of diminishing financial capacity
Aug 29, 2015 | aging, elderly, financial elder abuse, scammers, senior investor
When the medical information and personal data of 80 million Americans was hacked at Anthem Blue Shield it served as a wakeup call. It provides us with another way concerned professionals can educate and warn their clients about keeping personal data safe.
Get this: The information gained by the hackers – including social security numbers and birth dates and even income – are an identity thief’s dream, and the massive breach makes clear that any record can be at risk when companies fail to take security seriously. (more…)
Aug 28, 2015 | 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, scammers, senior investor, seniors finances
The professional crooks are at it again. The U.S. Attorney’s office recently charged six defendants with yet another telemarketing fraud scheme targeting the elderly. The allegations are that the con artists sought out and preyed upon the elderly through their lottery scam. We see these reports often in the news, to the point that they seem very repetitive. The characters and the amount of money stolen from elders changes but the methods are the same over and over. They caught the scammers this time and charged them with theft of a total of $400,000 from various victims. That’s the least of it. Other scams bring in millions from their vulnerable victims.
Why do elders fall for these things? Why don’t they get that the “Nigerian prince” or the “Jamaican Lottery” are clearly bogus and not to be trusted? (more…)
Aug 8, 2015 | aging, aging investor, diminished cognition, elder investor, finances for elders, financial capacity, financial elder abuse, senior investor
Carrie got concerned when her brothers suddenly began to exclude her from their Mom’s financial affairs. It didn’t feel right, but she wasn’t sure she could do anything about it. When she called, I got that “slow burn” feeling that comes over me when I hear about financial elder abuse. As a consultant for folks with aging parents, it’s not the first time I’ve heard this kind of story.
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