Respecting our elders: how to protect senior clients

As the demographics shift and more and more Canadians hit their twilight years, they can become vulnerable to exploitation, especially financial exploitation. Canadians 55 and older are rapidly becoming the largest constituent group in the country, expected to make up 35% of the population by 2031. With seniors and baby boomers holding the majority of the $13 trillion in financial assets owned by Canadians, this combination of vulnerability and wealth means they are ideal targets for opportunists.

The problem lies in the fact that seniors are some of the most vulnerable to fraud and exploitation, as they begin to suffer the onset of cognitive decline. While people of all ages are potential targets for fraud, seniors are a common target. It’s estimated that between 2014 and 2016, those aged 60-79 lost nearly $28 million to fraud.

As a financial advisor, you may start to see more and more cases of financial exploitation amongst your senior clientele. So how can you protect your clients from falling victim to financial scams or undue influence? Start by understanding the signs of cognitive decline, then identify the common signs of abuse. With senior or aging clients, it’s critical to take notes and pay attention to the indicators.

IFIC has prepared these Advisor Insight documents to help you navigate these situations:

Protecting Investors from Financial Exploitation

Meeting the Needs of Investors with Cognitive Decline

Signs of cognitive decline

If you don’t communicate regularly with your clients, it’s challenging to monitor progressive cognitive decline. Here are some questions to ask:

• Do you notice your clients having more problems with their memory? Are they always forgetting things or asking you to repeat yourself?
• Do your clients require more time doing tasks that were simple and straightforward for them before, such as completing forms or reviewing documents?
• Do your clients have a hard time comprehending concepts that they had previously understood?
• Are they having more difficulty making decisions compared to before?
• Are they unable to perform simple mathematical calculations?
• Do they demonstrate signs of confusion? Are they confused about what date or time it is or where they are? Are they missing appointments?
• Do they demonstrate large mood or behavioural swings? Are they becoming increasingly passive, anxious, or aggressive?
• Are they starting to look disheveled or unkept?

Signs of abuse

It can be difficult to identify abuse, but answering these questions can provide some indications on whether your clients are facing abuse or manipulation.

• Are your clients suddenly reluctant or hesitant to discuss their financial situation with you?
• Is a previously uninvolved party engaging with you about your clients? Are the clients deferring decision making power to this individual?
• Does the previously uninvolved party suddenly present you with a power of attorney for your clients?
• Are you now receiving instructions that contradict or are inconsistent with the plan you had in place for your clients? Are the previously agreed to plans with your clients now disrupted?
• Are funds being requested from your clients’ accounts that are out of the norm? Are there suspicious or unexplained withdrawals of cash?
• Are you having problems getting in touch with your clients?
• Are there changes that are suspicious, such as a new power of attorney, will or trusted contact?
• Are your clients isolating themselves from their family or friends?
• Are there indications of physical neglect or abuse?

How you can help

As a financial advisor, you can play a significant role in ensuring that your senior clients stay safe and secure, and that their wishes are respected. Here are five things you can do help your senior clients.

• Whether or not there is a power of attorney, keep in mind that your clients retain full control over their own accounts. Talk to them first about any concerns that you have.
• It’s always a good idea to document your meetings and discussions with your clients. Having a colleague present in meetings to take notes frees you up to focus on your clients.
• If you do have concerns, inform your clients that you’re required to discuss them with your supervisor, to protect their best interests.
• If you suspect financial abuse, report it to your supervisor and follow the policies and procedures set out by your firm.
• Seek guidance before contacting a power of attorney or trusted contact or acting on instructions. Discuss the circumstances with your supervisor to ensure you’re meeting all regulatory and privacy rules or regulations

Preparing your senior clients

There are steps you can take before your clients display signs of cognitive decline. Consider the following:

• Recommend that your clients appoint a power of attorney and to keep it up to date.
• Ask them to designate a trusted contact – someone you’re authorized to speak with but has no power over your clients’ accounts.
• Request an introduction to their power of attorney or trusted contact.
• Deliberately observe and take note of your clients’ abilities to understand financial information and make decisions.
• Inquire about your clients’ relationships with their family members and other professionals, such as lawyers or accountants.
• Ask your clients about any trust issues or potentially concerning family dynamics, or individuals with a history of manipulation or exploitation.

These conversations may not be easy, but they’re beneficial for everybody involved. Talking to your aging clients about protecting them and their assets will go a long way in ensuring their comfort and confidence in their financial future.

Want to learn more about protecting your clients? Check out these blogs on seniors and financial fraud and how to avoid financial fraud.