As a financial advisor, you have a responsibility to protect your clients’ best interests. Given the nature of your work, you’re entrusted with privileged information - and not just of the financial type. If you work with a client for a long time, you learn things about their family situation, their career, their health, even their doubts and values.
This can be especially true with senior clients. As individuals who are closer to the end of life, they have lots of particular issues to consider: retirement, healthcare planning, life settlements, long-term care, and estate planning, among others.
If your senior client is beginning to suffer from an ailment like dementia or Alzheimer’s, or if you suspect someone is taking advantage of him or her, you can be put in a difficult position. How do you protect their best interests without betraying the confidentiality of your relationship? This list of do’s and don’ts will help you navigate the tricky situations that can arise.
Do: Listen to your clients, and ask about any sudden or unexpected changes in their lives AND accounts.
You’ll learn a lot from your clients simply by listening to them. If you’re on friendly terms with a senior client, chances are he or she will chat a bit about his or her life during appointments. If anything major seems to have changed, like a child suddenly moving away, a spouse becoming ill, or a close friend or relative passing away, it’s ok to follow up with some questions - as long as you stay within the realm of appropriateness.
Major life changes can be triggers for things like depression, anxiety, or elevated stress, all of which can affect decision-making abilities. This is especially true for seniors, since our decision-making abilities can begin to decline anyway as we age. You don’t want to see your client decide to gamble his or her life savings on a questionable investment, or give away a portion of their retirement fund to a long-lost relative.
Don’t: Assume your client is unable to look out for him or herself unless you notice definitive signs.
While you always should be on the lookout for signs of exploitation or financial fraud with your clients, don’t assume a client is incapable of looking out for him or herself unless you notice something definitive.
That could be something like an intent to make a large financial gift to a new “friend” whom you’ve never heard mentioned, or to purchase a shady financial product. In cases like this, make sure you ask enough questions to get a clear picture of what’s going on, and advise against these decisions if they seem questionable.
Do: Involve family members if necessary, with your client’s permission.
If you think it would be wise to get a younger family member involved, like your client’s adult child, ask your client if it would be ok to invite that family member to sit in on appointments.
If the client says yes, then bring the family member up to speed and be sure to be honest about any concerns you have about your client’s decision-making or vulnerability to scams. The goal is to keep that family member involved in your client’s ongoing financial management, so that someone else is alert to potential red flags.
Do: Be proactive in alerting your clients to popular scams, fraud threats, or other potential problem situations.
Certain types of scams seem to wax and wane in popularity, and as a financial advisor, you should be proactive in telling your clients about scams that they need to be on the lookout for.
Recently, for example, there’s been an IRS scam involving con artists calling seniors to try and get personal taxpayer information from them.
Seniors, and all your clients, should be reminded never to give sensitive information like Social Security numbers over the phone, and encouraged to run any sales pitches or strange phone calls they receive by you.
Serving senior clients can mean taking on certain extra responsibilities. Make sure you’re prepared for those so you can help them maintain a healthy, happy retirement. Read more about elder financial abuse in our post “Spotting the Signs of Financial Elder Abuse.”