Mar 25, 2016 | aging, aging investor, diminished cognition, elder investor, elderly, finances for elders, financial capacity, finra, handling money for seniors, investor, senior citizen investor, senior investor, seniors finances
Have you ever felt frustrated when you thought your client was showing signs of declining mental status? Did you ever want to get someone else involved in financial decisions but thought you couldn’t because of privacy rules?
The average advisor has seven clients with some form of diminished capacity. Perhaps you are one of them, not comfortable with the privacy laws that restrict you from calling in someone to help when your client doesn’t seem all there anymore.
If you are worried that you must just stand by and watch a vulnerable client make bad decisions, or worse, get ripped off by someone who is manipulating him and taking advantage of his cognitive impairment, there’s good news. There is a way around the confidentiality conundrum. You need your client’s permission in advance to call that third party.
How do you plan for the possibility of needing a third party? Take your cue from lawyers. When we have a conflict that would be there unless we get an ok from our clients, we design a document that allows the client to give up the right she would otherwise have. We get the client’s signed approval do to what we need to do whenever feasible. You can do the same thing with privacy restrictions.
Imagine that you have some clients over the age of 65. Imagine that you are a proactive thinker. You want to keep all of them safe and keep those clients, even if they decline cognitively in the future. Imagine that you have been really smart and have gotten a special permission document done. Every client over age 65 signs it. You are ready!
What Should A Privacy Permission Contain?
We recommend three essential elements for your document.
First, you need to identify the circumstances under which your client wants to give you the ok to call in that third party they identify.
Second, the document needs to be legally sufficient; i.e., it should have language like an advance healthcare directive or a standard durable power of attorney.
Third, it needs to be signed and notarized by your client.
How Do You Get It Done?
Your legal department should be able to help you. If not, a model document was created by lawyers at AgingInvestor.com, in the context of a senior-specific program to protect your aging investors. You can’t just throw one together. As you have to know, recognize and document the signs of diminished capacity that would lead to use of this kind of document, those are prerequisites. Then the matter escalates according to a standard procedure. Get a clear path. Find out more about it HERE.
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, elder investor, elderly, finra, investor, NASAA, SEC, senior investor
“Regulatory Changes Advisors Must Face With Your Aging Clients”
Summary of course:
Update on what the SEC, FINRA an NASAA have in mind for financial professionals across the country in how they do business with clients over age 65. Review of the research these agencies have done, Model Rules regulators have created and what exemplary things they found firms and organizations doing for aging clients. They all want financial professionals to be more protective of aging investors. They envision mandates for reporting financial abuse of elders will and expand mandates into other areas. This course highlights areas regulators expect advisors to address, such as training in senior issues and increased communication with aging clients. It provides specifics on how to get ready for what the regulators want so that you will not have to scramble to comply with mandates.
Learning Objectives:
- Understand the regulators’ concept of a “senior program” and how you can create one.
- Know the Model Rules about financial abuse the regulators have already publicly posted.
- Know what other firms across the US are doing about aging investors that you should be doing too.
- Know what action steps you can and should take now to be ready for mandates.
Aug 29, 2015 | aging, aging investor, elder investor, elderly, finances for elders, handling money for aging parents, handling money for seniors, senior citizen investor, senior investor, seniors finances
3 Ways To Talk With Aging Parents About Finances
One benefit of the increasing life expectancies for Americans is that more people have bonus years for enjoying the company of their aging parents.
But all is not rosy. Those extended years also boost the odds that parents could go broke or suffer from dementia and be unable to make financial decisions for themselves.
That can leave adult children perplexed about when and whether they should step in and find out what’s happening with their parents’ money, says Carolyn Rosenblatt, a registered nurse and elder law attorney.
“Unfortunately, it’s not always easy to have those conversations,” says Rosenblatt, co-author with her husband, Dr. Mikol Davis, of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices.
“Some stubborn parents just refuse to talk about their money. No matter what their adult children say to them, they put it off, change the subject or tell their children it’s none of their business.”
Of course, many adult children aren’t in any particular hurry to broach the subject either, says Davis, a clinical psychologist and gerontologist.
“They have their own discomfort about it and procrastinate,” he says. “Then a crisis comes up and no one has any idea what the parents have or where to find important documents.”
But Rosenblatt and Davis say it’s critical that these conversations take place so that the offspring can gather information about such subjects as the parent’s income and expenses, where legal documents are kept, and what kind of medical or long-term-care insurance the parent might have.
The success of these conversations often comes down to how you approach the subject, Rosenblatt and Davis say. They offer a few tips:
- End the procrastination by picking a date for the talk. Make an appointment with yourself to bring up the subject at a specific time. An opportune time to schedule this is after a birthday, a family event or a holiday where other family members are together who may share in the responsibility for the aging parents in the future.
- Show respect. Tell your parents you understand and respect their reluctance to discuss their finances. You can even make the conversation about yourself rather than about them. Say that you’re concerned that if something went wrong, you would be completely lost as to how to help them.
- Address their fears head-on. Let them know you understand they are worried that if they talk about their finances their independence might be taken away. You might add that you want them to maintain their independence as long as possible and you’re willing to help accomplish that, but you can’t do it without the correct information.
“Getting past an aging parent’s fear about talking about finances can be daunting,” Rosenblatt says. “But a well-planned strategy for approaching the subject will give you your best chance.”
About Carolyn Rosenblatt and Dr. Mikol Davis
Carolyn Rosenblatt and Dr. Mikol Davis are co-authors of The Family Guide to Aging Parents (www.agingparents.com) and Succeed With Senior Clients: A Financial Advisors Guide To Best Practices. Rosenblatt, a registered nurse and elder law attorney, has more than 45 years combined experience in her professions. She has been quoted in the New York Times, Wall Street Journal, Money magazine and many other publications. Davis, a clinical psychologist and gerontologist, has more than 44 years experience as a mental health provider. In addition to serving his patients, Davis creates online courses and products to assist professionals and the public with understanding aging issues. Rosenblatt and Davis have been married for 34 years.
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Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com
Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too.
Dr. Mikol Davis, Psychologist, Gerontologist offers in depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients.
They are the authors of "Succeed With Senior Clients: A Financial Advisors Guide To Best Practice," and "Hidden Truths About Retirement And Long Term Care," available at AgingInvestor.com offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click HERE
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Jun 18, 2015 | aging, elderly, finances for elders, financial elder abuse, senior investor
The gripping thing about this case is not just the horrific means used to steal money. It’s the shocking failure of every person involved to ever notice that over a 6 year period, a caretaker isolated, abused and stole millions from a 74 year old, helpless stroke victim.
Li Ching Lu was convicted of financial abuse via fraud and forgery in Long Beach, this month. She got 4 years in state prison, which seems appallingly short for what she did. Over a period between 2002 and 2010, she emptied her victim’s bank accounts by writing checks and depositing them in 63 different accounts at 4 different banks.
Why didn’t anyone notice that she began to isolate her victim from her friends, family, financial advisors? Did any of them care enough to check on their friend or client? Did the cessation of contact from a person who had amassed a small fortune from investments ever alarm the investment advisors on her team enough to find out why? (more…)
