Oct 3, 2014 | aging, diminished cognition, elderly, scammers
Most days at I get a call from an adult child of an elder, asking me about shady dealings over a parent’s finances. Sometimes it’s the niece, grandson, or other family member the caller is worried about. Sometimes it’s the caller’s sibling whose actions are in question. And all the cases I hear about have something in common: red flags of elder abuse are present, but no one is taking any action to stop them.
For example, a 62 year old woman whose mother is 90 called and said she is worried because she lives at a distance from her mother and her niece who is caring for the mother won’t return her calls or emails. And she also told me that a step-brother is a stockbroker and has financial power of attorney over her mother.
That’s 2 red flags, and she was just warming up.
Most abusers are family members. Caregivers are next and professionals, like stockbrokers, lawyers, financial advisers and insurance brokers are next in line for frequency of abuse. I do all I can to educate and urge action by family members to stop abuse when it happens and when it’s suspected to get a closer look.
I recently saw a new publication from our government, designed to raise people’s awareness about financial abuse and what an agent should and should not do when acting as agent on a financial power of attorney document.
Elder abuse is a huge international problem, and it’s finally getting more attention from the Federal government, thanks in part to the Consumer Financial Protection Bureau. They came out with an excellent free little booklet to help folks understand how to handle someone else’s money when they get appointed as a Power of Attorney. It’s called Managing Someone Else’s Money: Help for agents under a power of attorney.
You can get it here: http://files.consumerfinance.gov/f/201310_cfpb_lay_fiduciary_guides_agents.pdf.
Here’s what I like about this booklet.
It’s clear. It tells you what you can and can’t do as an agent. If you’re interested in being honest, it gives your guidelines to keep it that way. On the other side of the question, unscrupulous agents use the paper as a license to steal. Unfortunately, no court is involved and no one is watching. They help themselves to an elder’s money, house, investments, and anything else of value and some seniors are left destitute. I believe that sometimes, education can help family members stop other family members from committing this abuse. They can also warn the elder who is living independently about the sneaky thieves who devise ways to get elders’ money that are not so obvious. The booklet warns about some common scams. Not everyone knows about these and they keep getting victims to give up money.
The booklet lists 10 scams. I’ve picked a few to reiterate here for you. Would you know about these if they were going on with your elder right now?
1. Relative in need. Someone pretending to be a family member or friend calls or emails and says they are in trouble and need the elder to wire money right away. And by the way, you don’t have to be frail and isolated to get one of these pitches. I got one myself recently. Someone had hijacked my sister’s email address and sent emails to all of her like named contacts asking to wire money to her in a foreign country. Didn’t work with me, but it does get people to wire money to thieves. If no one fell for the scam they would stop, but it goes on.
2. Fake government funding. The recipient gets an official looking letter from a pretend government agency offering help with housing, home repairs, utilities or taxes. Just give them your credit card info and you get the help. Vulnerable and low income seniors fall for these scams because they are worried about the very things the ripoff artists offer them.
3. Home improvement. Targeted elders who own their homes (can be easily found in public records) are approached with an offer to fix something. It can be a roof, a fence or in my mother in law’s case it was to clean the air ducts. They take money in advance, overcharge and do shoddy work, or don’t do the work at all. The trusting elder doesn’t have a way to pursue them, as they disappear.
The booklet is 23 pages and has two pages of resources listed a the back. Among them are Adult Protective Services, and where to get free legal help for seniors. I think they did a fine job on this. Maybe that’s not the way I would comment on a lot of other confusing or poorly written government efforts at educating the public. And they don’t teach you this stuff in school. My hat’s off to the CFPB.
If you have an aging parent or other loved one, or you’re curious because your aging loved one put YOU on the documents that will one day cause you to have to handle their money, check out the booklet for yourself. I’m happy to share the good resource with you. Yep, your tax dollars at work.
Until next time,
Carolyn Rosenblatt
Dr. Mikol Davis
AgingParents.com and AgingInvestor.com
Aug 15, 2014 | aging, aging investor, elder investor, elderly, investor, senior citizen investor, senior investor
Doesn’t every financial advisor want to stand out from the crowd? Be better at delivering services? Somehow get a reputation as a cut above the average guy or gal in the biz?
If you are seeking to distinguish yourself, you can. The secret is not in getting better returns, finding unique ways to protect assets or getting it right with your investment strategies. It’s in offering a different service from the other guys in addition to doing all the money management, usual things well.
The different service we’re talking about is looking at your older client’s age, making a plan to look at all the aspects of their lives that are likely to change as they age and being an educator and advisor to help them plan for those things. This is not limited to figuring out how much your client will need in retirement. It goes way past that, and the issue of housing. Yes, your role as advisor will go beyond financial matters into the personal and the so called “soft skills’!
Does this make you uncomfortable? “I just manage money” you may be thinking. But the financial picture is connected to the person, who is usually connected to a family. The finances are not in a vacuum with no relation to an investor who is aging, and her needs as she gets older and may lose her ability to make sound financial decisions. This is not about merely preserving assets and making the money last. People are of course affected by the aging process, which brings with it risks. One of those risks is dementia and loss of financial capacity for accepting your advice. What then?
“I’ll worry about that when my client gets old” you say? The problem with that thinking is that you don’t know when your client is “getting old”. Dementia is a sneaky brain disease that usually develops over years. The signs are subtle. And dangerous. The risk of Alzheimer’s Disease, the most common kind of dementia doubles every 5 years after age 65. 5.2 million people already have it. Lots more are expected to develop it as Boomers age. One day, as you avoid conversations about possible loss of financial capacity, you may find that it is too late to get your client to sign anything, agree to anything, or worse yet, that he is a victim of financial abuse.
If you truly want to stand out as an advisor, not just for being a great producer, but for offering cutting edge service, get the training you need to make that service include skill in addressing and anticipating possible loss of capacity in your clients. Get the right document in place to protect your client and protect yourself from regulatory questions about privacy.
If you are considering this suggestions seriously, visit us at AgingInvestor.com and sign up for
one of our online courses. We’ve got the aging expertise you may not have yourself and you can get a lot smarter about aging clients as you get some training.
Meanwhile, think about becoming a unique service provider who is branching into an area no one can avoid: our populations is living longer than ever. You are in a great position to be a forward thinker about aging issues with your clients as a part of your work. You can take pride in it.
Until next time,
Carolyn Rosenblatt, RN, Attorney
AgingInvestor.com
Aug 13, 2014 | aging, aging investor, diminished cognition, elder investor, elderly, investor, senior citizen investor, senior investor
There is a buzz going on about the problems financial professionals are having with clients who are aging and losing capacity for financial decisions. It directly affected Kathleen Pritchard, head of business development at Legg Mason.
Her father-in-law was diagnosed with Alzheimer's disease at 73 and she and her husband approached the father's financial advisor for help. He had been managing an estate worth over 8 million dollars. He said,
"I basically don't do any of that. I just manage your dad's money."
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Aug 1, 2014 | aging, aging investor, Alzheimer's disease, senior investor
As just about everyone was outraged and offended by Donald Sterling’s racist comments, you might wonder how there could be anything to learn from what he said and did in the time that has passed since his story first broke.
To some people, Donald Sterling seemed rational. A horrible racist, but being that way in control of his faculties and choosing to do what he did. Was there something wrong with him or was he just being his racist and unreasonable self? I think his conduct is a good example of how a cognitively impaired person can seem logical and in control one minute and totally out of control the next. And he is an example of how an impaired person can destroy his chances, make bad decisions and have a massive loss. You just might find yourself with a client like that.
Here’s what I mean. Donald Sterling’s comments led to his wife insisting that he be examined by two doctors, psychologists. Both concluded that he had Alzheimer’s Disease. When you saw Sterling on TV, you might have thought, “well, he seems weird, but he apparently knows what he’s doing”. Did he?
A person with Alzheimer’s lacks judgment about finances. That issue was at the very heart of the case when he agreed to sell the L.A. Clippers, and then changed his mind and tried to block the sale in a court battle with his wife. Some might be skeptical about the diagnosis of Alzheimer’s. After all, two billion dollars was at stake and fights over anything that big can bring up just about anything.
But notice this: if you want to win in court, you are going to put on your best behavior. If a judge is looking at you to make a decision about whether you are financially competent or not, you’re not going to do anything that would lead the judge, holding enormous power with his decision, to rule against you. That’s what a reasonable person with ordinary good judgment would do. Even if you’re mad as hell, you’re not going to lose it and prove to the judge just how out of control you are. But lose it is exactly what Sterling did with his chance in court.
Imagine that someone with that much money would hire the most highly skilled lawyers possible. Imagine that they were ready with all possible evidence to refute the allegations of Sterling’s wife that Donald was not competent. And what did he do? He behaved erratically over several days of testimony. He raised his voice at his own lawyers and those opposing him. He called his wife a “pig” in court. In other words, he could not exercise enough good judgment to do what any reasonable person would do in his circumstance. H could not rein in his impulses. He blew it.
Of course, the judge ruled against him. He was found to be incompetent to make a decision to stop the sale of the Clippers and his wife won out.
The lesson here is that people who have dementia, the major symptom of Alzheimer’s Disease, lose their judgment about finances. They may make bad decisions against your advice. They may behave erratically. They may act out one minute and be apparently fine the next. When you have a client who has a history and a pattern of making certain kinds of choices about how to invest his money, and he begins to divert from that, you know it is a red flag that something may be wrong. You know that he could lose his wealth if this keeps up. What are you supposed to do?
Other than escalating the problem to compliance sooner or later, you may not think there are any choices. But we at AgingInvestor.com believe there are choices about how you are going to approach and deal with these problematic clients, whether they are as extreme as Donald Sterling or not. There are options for anticipating the realistic possibility that your clients who are aging are going to become cognitively impaired. You can create innovative policies to manage them in a proactive way, involving family, involving significant others, and complying with privacy considerations. You don’t have to fire the client and lose the assets under management. If you have a clear path that enables you to take protective action and engage a third party whom the client has identified and appointed far in advance, you may be able to work with the appointed person and continue to carry out the wishes and philosophy of your client even if he becomes impaired. We are here to help you craft those policies and we empower you to implement them.
This process can change and disrupt the old, outmoded ways of dealing with our aging investors. It’s radical. It’s different. We think it should be done. If you would like to explore this for yourself or your organization, contact us today at AgingInvestor.com for a preview. We will help you become a change agent and an innovator.
Until next time,
Carolyn Rosenblatt
Jun 12, 2014 | aging, aging investor, Alzheimer's disease, investor
When Competence Is Neither Black Nor White
Anyone who has spent time around older adults, whether they be family members, friends or your clients, probably knows someone who seems “with it” sometimes and “not with it” at other times. They can change from making sense to not making sense in a matter of minutes or hours. Do you think of this person as competent? Do you overlook all the little “slips” and signs of their not being able to track the conversation? Do you treat the person as if everything were fine and normal? Here at AgingInvestor.com, we refer to the in-between state of mind as the grey zone. It describes a person in a way that is neither black nor white, neither completely without decision-making ability nor completely safe in decision making. It is a variable problem and one nearly all of us are going to witness sooner or later. Why?
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