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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Dec 19, 2014 | aging, aging investor, diminished cognition, elder investor, elderly, financial elder abuse, investor, scammers
When your aging client has contact with you, consider it an opportunity to educate them about more than the status of their portfolio you manage. Your client’s efforts to maintain financial safety can be thwarted by clever scammers who are constantly devising new ways to take advantage of them. You are in a perfect position to help keep them informed about financial abuse and the latest information on tactics scammers use. Don’t make it someone else’s problem. Make it part of your services.
Take for example the “grandma I need help” scam. My 92 year old mother in law told me about this one. Someone actually had the nerve to try it with her, but she’s smarter than they were and it didn’t work. However, one of her friends did fall into the trap. Somehow the scammers got a list of phone numbers of many of the seniors living in the nicely appointed neighborhood in her retirement community. They get a young man to call from their list of numbers and say “Grandma?” when a woman answers. If she thinks it’s her grandson, she’s bait. The thief then says he’s in trouble, with some made-up some story to get her to worry about him. He then asks her to wire money right away to get him out of this jam. The unsuspecting do it. And get taken.
A newer scam is the gift basket trick. Again, the older person’s phone number and address are known to the thieves. They call the potential victim to be sure he’s home and then tell him they’re Express Courier or any other name and they have a gift delivery. Will he be home in the next hour? If the victim says “yes, I’ll be here” an official looking truck with a courier name on it pulls up within the hour, and the delivery man hands the victim a lovely basket of wine and flowers. The trap is in the delivery man then asking the victim for payment for a “delivery fee’’ because the basket has alcohol and had to be hand delivered to an adult rather than left on the doorstep. Or so they say. The fake courier insists on a credit card payment rather than cash, even if the fee is just $3.50. He uses a small portable credit card scanner and asks for the PIN number for any debit card. What the victim does not know is that the scanner is a device used to steal the credit card information, in the way this kind of information has been stolen from ATMs and gas station credit card machines in the past. The scanner the courier uses even prints out a nice little receipt, making it all the more believable.
The victim doesn’t realize his credit card information has been used to make a dummy credit card with his name on it, which the thieves quickly use until the victim cancels the card. Thousands of dollars can be stolen from the victim’s by ATM cash withdrawals and numerous purchases before the victim knows what is going on. People are getting tricked by this. The scam is working for the scammers and you know they will keep doing it until the public gets well informed enough to decline the offer of the fake gift delivery over the phone.
If you are managing accounts for older clients, take the opportunity to help educate them about these nasty fraudsters who are easily able to get their names and phone numbers. You can make a difference. Tell them in person or make a handout about scams to email or send to them. They may see you as protective of their financial safety in more ways than one. That can uplift your image, always a good thing. We’ll keep you informed about elder abuse and how to protect your aging clients right here at
AgingInvestor.com.
Until next time,
Carolyn Rosenblatt, RN, Attorney
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
Alice, The Unsophisticated Investor
Alice, my mother in law, is blessed with a great memory and pretty good health for a woman of her age. She works at it. She’s been a widow for 6 years now. Dad always handled their finances. Since she’s been on her own, she relies on her two adult children and an accountant friend to guide her about her investments. She was referred to a financial advisor known by a family member. She thought things were fine until a year went by, the market was doing well and she had no gains at all in her portfolio. She’s comfortable, but not wealthy by most measures. There is enough to take care of her, though full time care would eat up a lot of what she has. Luckily at this time, she is able to remain independent.
When She Discovered The Truth
Alice decided to change financial advisors. It was then that she learned, to her dismay, that her other advisor had done something that really got her angry. He had taken 10% of her investable assets and put them into a real estate investment trust (REIT) that could not be liquidated without a substantial financial penalty to her. She is not savvy about complex investments and relies on others for advice. She relied on her advisor a lot. She is clear that she needs to watch out for herself. She says the advisor never told her what he was doing with this investment and never explained that she would not be able to access the funds if she needed them unless she suffered a loss, in the form of a penalty. He, of course says he told her all about it and she agreed. She doesn’t believe him. My husband, Mikol, interviewed her about this and put it on YouTube. Here’s what Alice has to say. http://tinyurl.com/pmqf3j2
In the July 14, 2013 InvestmentNews, Dan Jamieson reported that the Financial Industry Regulatory Authority and the state regulator in MA are cracking down on exactly the kind of nontraditional, illiquid investment the financial advisor chose for Alice. Mr. Jamieson reports that In February, Massachusetts settled a case against LPL, which agreed to pay at least $2 million in restitution and $500,000 in fines related to the sale of nontraded REITs.
State regulators in Massachusetts settled their cases against five high profile firms who agreed to pay a total of $6.1 million in restitution to investors, and fines totaling $975,000.
FINRA CRACKDOWN
State regulators aren’t the only ones cracking down on alternatives.
FINRA also warned members in 2012 in its annual exam priorities letter that it was “particularly concerned about sales practice abuses [and] yield-chasing behaviors” that might lead investors into unsuitable complex products.
Products under scrutiny by FINRA in 2013 included business development companies, structured products, nontraded REITs and private placements.
“Finra grinds us on structured notes and commodity-linked notes,” said the president of a broker-dealer organization, who asked not to be identified.
The regulators are reported to have found out that in the REIT cases, people didn’t know what they were investing in. We think that is true for Alice. We also think her advisor, knowing her lack of sophistication, took advantage of her for the sake of his commission. His justification is that “she didn’t need the money” and that “she was investing for the benefit of her heirs”. Her family, particularly her son, thinks that is rather arrogant of him. How does he know whether she’ll live to be 100 and whether she will need the money? Furthermore, Alice is not investing “for the benefit of her heirs” when she is relying on her funds to take care of her own needs for the rest of her life.
What We Did
As soon as we found out about the REIT sold to Alice, then 90, and how illiquid it was and for how long, we confronted the advisor with a letter and sent him a copy of the Investment News article. He called shortly afterwards. He tried to justify his actions, but was told very politely by my husband that Alice was to get full restitution or a FINRA complaint would be promptly filed.
Permission of various kinds had to be obtained. The advisor had left his firm and gone with a large bank. This messed things up for him for a time, but I thought he deserved it. This was the threat of a claim. Two lawyers called and argued how great the investment was. We held our own and continued to insist on full restitution for Alice. More excuses. Months of lawyering and letters later, she got full restitution. You’ve never seen more butt-covering letters from them.
The lesson here is to be smarter than this guy was. It’s not that the investment itself was bad. It paid a decent return. It’s that at her age it was clearly unsuitable. So keep the age of your client in mind and don’t make dumb assumptions like, “she didn’t need the money”. That is a foolish statement for anyone to make about a 90 year old with a relatively modest portfolio who could need hundreds of thousands of dollars of care as some seniors do before the ends of their lives.
If you need private advice about any aging client whose behavior makes you question the client’s financial capacity for decisions, call us. We have the expertise to help you assess the client’s abillity and we can guide you.
Don’t wait for FINRA to come knocking.
Until next time,
Carolyn Rosenblatt, RN, Attorney, Mediator
AgingInvestor.com
So, when you get this properly written, be sure that you have garnered about proofreading and editing services 10 points.
Apr 7, 2014 | aging, aging investor, Alzheimer's disease, investor, senior citizen investor, senior investor
A Red Flag For Financial Advisors With Aging Clients
Hello there. I’m Carolyn Rosenblatt, RN, Attorney and family mediator for those with aging loved ones. My passion is working with older adults and their families, as well as those who serve them.
AgingInvestor.com is dedicated to helping those in the financial services industry learn more about aging from those of us with expertise in aging. Our purpose is to help you better serve your clients, keep your business as they age and serve them more competently as their aging begins to create issues for you.
Most of us, in general, do not have any specific knowledge about aging itself, much less how it can affect the brain and decision making ability. We base what we know on our family experience or what we have learned from friends. That’s fine, but it can really limit our perspective.
The fields of gerontology, medicine, healthcare, and other related disciplines have produced a great deal of research that can be helpful to all of us in a society where longevity is increasing so significantly. We are indeed in a changing environment when it comes to aging. Many of us are going to encounter or are already encountering issues with which we have no experience but which we have to face. Our parents, grandparents and our clients are living longer and having more problems related to aging. We may be unprepared. (more…)
