In wealth management, we frequently discuss topics centering on aging, including the Great Wealth Transfer, advisors finding successors, and – of course – retirement planning. While these are important to both the industry and the end clients it serves, there are other aspects of aging that also deserve advisors’ attention.
Advisors should know how to best serve clients who enter their sunset years without the support of a spouse or family member near them, as well as clients who bring successor decision-makers into the client relationship. And, sadly, elder abuse exists, so advisors must know how to spot and react to it.
We spoke with Tom West, Senior Partner at Signature Estate & Investment Advisors, to learn how advisors can serve elderly clients in these situations. Our questions and his responses follow.
WSR: What are some signs that can help an advisor determine if elder abuse is taking place with a client? What can the advisor do if they suspect elder abuse?
West: Potential elder abuse is sometimes revealed to advisors through signs such as sudden, unexplained withdrawals or transfers of funds, changes in spending habits, the appearance of new joint accounts or authorized users, or unusual investment activity. Other red flags include a client appearing confused about recent financial transactions, forgetting about meetings or forgetting how to get to your office, a sudden change in their legal documents (e.g., wills, trusts or power of attorney), or the presence of a new or overly controlling individual in financial discussions.
If a financial advisor suspects elder abuse, they should first document the concerning behaviors or transactions. Then have a private conversation with the client to clarify any actions, asking careful questions about their financial decisions or the involvement of new individuals. Advisors should also seek advice from the client’s attorney and trusted contact, as the signed agreements allow.
Advisors may also need to notify their compliance department to ensure they follow legal and ethical guidelines while protecting their client’s financial well-being. As a last resort, a call to adult protective services should also be made in coordination with compliance.
WSR: How should advisors approach successor decision-makers for elderly clients?
West: Best case, an advisor should work to establish a relationship early with successor decision-makers, ideally before the older client becomes incapacitated or unable to make decisions. If an advisor hasn’t developed a clear line of communication with successor decision-makers, the first order of business is ensuring that the older client has officially designated a successor decision-maker legally, such as through a power of attorney or trustee document. An additional path could be reaching out to trusted contact designees, particularly if there is an overlap with designated successors.
The first order of business is ensuring that the older client has officially designated a successor decision-maker legally.
When engaging with successors, the advisor should clarify their role, the client’s financial situation and the long-term goals previously discussed. The financial advisor should also educate the successor decision-maker on the financial strategies in place and any relevant legal or tax considerations. This ensures a smooth transition and continuity in managing the client’s affairs.
Maintaining open communication is key, so regular updates and meetings with successor decision-makers can build trust and ensure they are well-informed. Throughout this process, the financial advisor and successor decision-maker need to respect the older client’s wishes and privacy, involving them in conversations as much as possible to honor their autonomy and preferences.
WSR: What are the keys for advisors who are serving elderly clients that are aging without a spouse or close relatives involved?
West: There are five keys to serving solo agers, or older clients who are aging without a spouse or adult children.
Build trust and understanding: Establish a strong relationship with the client, focusing on their unique needs, preferences and concerns. Understanding their personal goals and fears is crucial to providing tailored advice.
Comprehensive financial planning: Ensure all aspects of the client’s financial life are meticulously planned, including estate planning, healthcare directives, long-term care insurance and retirement income strategies. Advisors should encourage the client to designate trusted individuals (e.g., a professional fiduciary) to manage their affairs if they become incapacitated.
Ensure all aspects of the client’s financial life are meticulously planned, including estate planning, healthcare directives, long-term care insurance and retirement income strategies.
Coordinate with other professionals: Collaborate with elder law attorneys, aging life care managers and other professionals to create a holistic approach that ensures all aspects of the client’s well-being are covered.
Regular check-ins: Stay in frequent contact with the client to monitor their evolving needs, especially as they age. Regular reviews help adapt the plan as the client’s situation changes, offering peace of mind and ensuring their wishes are honored.
Emergency contacts: Encourage the client to provide emergency contacts, such as friends, neighbors and trusted contact designees, to act as points of contact for urgent situations.
Janeesa Hollingshead, Contributing Editor at Wealth Solutions Report, can be reached at editor@wealthsolutionsreport.com.
