The best time to help clients deal with issues pertaining to aging is before any decline begins, according to an expert who specializes in training financial advisers and other professionals in such situations.
Amy Florian, CEO of Corgenius, said that advisers should encourage their clients to put together a "diminished capacity letter" that outlines trusted contacts and identifies who should have power of attorney should they start to exhibit diminished psychological, physical, cognitive or mental capacity.
"I recommend having one of these for every one of your clients," Ms. Florian said on Monday at the
InvestmentNews Retirement Income Summit in Chicago. "You've got to have these discussions early."
She said that she is pleased to see regulators requiring an approach that she's advocated for many years. The
Financial Industry Regulatory Authority Inc. recently announced that a rule designed to prevent elder financial abuse would
go into effect in February. Among its requirements is that brokerage firms do their best to obtain from clients a trusted contact, such as a family member, who can help them with their affairs if they exhibit signs of dementia.
"Finra's getting on board to have that contact information on file," Ms. Florian said.
She also praised
Finra's senior hotline and federal legislation that would give advisers protection from civil liability if they report suspected financial exploitation of elderly clients. Several states also have approved elder-abuse laws.
The regulatory activity is a response to the growing challenges posed by the aging U.S. population, a trend that is having a
particular impact among financial advisers as they help baby-boomer clients prepare for retirement.
Ms. Florian offered eight action steps for advisers. Among them are prevention and education, including consolidating assets and ensuring that wills and other documents are in order. It's also important that advisers take note when clients demonstrate symptoms of a declining mental state.
"Documentation is your friend," Ms. Florian said.
Other important steps include talking to clients — "dig gently," Ms. Florian said — when signs of trouble emerge and involve family members as much as possible. When more members of a family participate, it is "harder for any one person in the family to take advantage" of a faltering elder.
Ms. Florian's
inspiration for her line of work — helping professionals help clients going through grief and transition — came from her own tragedy, the loss of her husband in a car accident when they were 25 years old. She has come to view life as "an hour glass stuck to a table."
"Every single grain of sand is precious," she said.
