By Jane Riley

Jane Riley, Chief Compliance Officer

Most nancial advisors have at least some clients that are considered “older.” The denition of “older” is very vague, as some clients may be near retirement and slowing down both mentally and physically in their 50s while others are still working and active in their 70s. From a regulatory perspective, the benchmark appears to be that anyone 50 years old and older is considered to be a senior. Working with older clients can offer
special challenges, especially when it is suspected they are starting to have memory issues. The easiest time to deal with memory issues is before they happen.

It is highly suggested to have conversations with clients about their wishes during initial fact- nding conversations, or during an annual account review. Discussion points may include: discovering if they have a durable power of attorney, encouraging them to establish one if they don’t; nding out who their other advisors and professional service providers (such as accountant and attorney) are and oer to provide them with duplicate account statements, and obtaining written permission to share information with those advisors; and if they have a trusted third party and obtaining an authorization to contact them if the need arises.

  1. Memory changes. The short-term memory may be the rst to go. Other behaviors to watch for include telling the same stories over and over, keeping multiple reminder notes around the house, and relying on friends and family to help with routine chores.
  2. Trouble with planning or solving problems. Working with numbers, balancing a checkbook, or paying regular bills may become more dicult – or even impossible – over time.
  3. Diculty completing familiar tasks. Examples include forgetting habitual things, such as how to get to the grocery store or dry cleaners, the rules of a favorite game, and how to work the microwave.
  4. Time and place confusion. Your client may lose track of dates or be unable to identify the day of the week or the season of the year.
  5. Sight and space issues. Your client may have begun to have trouble seeing, reading, or judging the size of the room or the distance to a wall.
  6. Problems speaking or writing. Pay attention to whether your client has trouble following or actively participating in conversations or even nding the right word to identify an object.
  7. Losing things or themselves. Your client may begin to misplace items in the house, place certain items in unusual places, or be unable to retrace his or steps or get back to familiar surroundings.
  8. Lack of judgment. Some individuals begin to mismanage money or give money to less- than-reputable people or organizations. Grooming habits may also decrease due to a lack of ability or desire to take care of these types of things.
  9. Social withdrawal. Your client may lose interest in friends, relatives, hobbies, or other activities that used to be important. He or she may also have diculty keeping up with a favorite sports team or activity.
  10. Mood or personality changes. Mood swings or changes can also be warning signs, such as depression, anger, or fearfulness. (Alzheimer’s Association, 2009)
  11. Inability to contact the vulnerable client
  12. Signs of intimidation or reluctance to speak, especially in the presence of a caregiver
  13. Isolation from friends and family
  14. Someone cashing checks without authorization
  15. Someone forging signatures
  16. Improper actions by duciaries (e.g., conservatorships, guardianships, trustees, attorneys-in-fact, etc.)

What Should Be Done if These Changes are Noticed

If permission has been granted from the client to contact a family member or third party, they should be contacted and brought into client meetings. All conversations with the client and related third-parties should be documented. If memory issues or third party nancial abuse are suspected, the compliance department should be contacted for further guidance. Accounts will be monitored, and in some circumstances, adult protective services may be contacted.

How Advisors May Protect Themselves

In working with older clients, advisors need to follow steps to protect themselves as well.

  1. Gather all information about the client – POA information, general health, when they will need to access funds,
  2. Document all conversations – and share the documentation with the client. Personal observations regarding the client can be added later or kept separately.
  3. Include third-parties in conversations – if the client doesn’t have a family member, friend from FINRA, the SEC and other sources to help explain
  4. Make sure suitability is fully assessed before placing the client in any investment
  5. Don’t pressure the client into purchasing a product
  6. Follow all company policies and procedures

The Compliance Department should be contacted if any capacity-related issues are suspected. At that point the situation can be analyzed and dealt with as prescribed by the situation.