Seniors exhibiting signs of diminished mental capacity are one of the most troubling and sensitive issues advisors face. If this happens, a client may no longer be capable of making his/her own financial decisions. A study by the National Institute on Aging revealed that impaired cognition affects approximately 20% of people aged 85 years and older. However, this impairment can also exist at younger ages.
The Warning Signs
As a trusted advisor, you should be aware of the warning signs that may indicate diminished mental capacity and learn to recognize the potential signs of a client who is impaired due to a physical, mental, or sensory disability. If a client exhibits any of the following behaviors or characteristics, or any other behaviors or characteristics that raise concern, representatives should contact their manager. Clients with diminished capacity may exhibit the following behaviors which may indicate their inability to properly weigh financial decisions:
- The client has difficulty communicating with you.
- The client appears unable to process simple concepts. His/her questions and comments seem disconnected or contradictory.
- The client’s spouse/partner is answering questions for him/her. The client appears unable to appreciate the consequences of decisions.
- The client does not remember details from prior discussions including requests to process transactions.
- The client’s physical appearance suggests an inability to care for himself/herself. The client seems confused, nervous or afraid.
- The client is disoriented with his/her surroundings or social setting. The client’s home seems unusually disorderly (e.g., piles of unopened mail).
- The client is making decisions that are inconsistent with his/her current long-term goals or commitments.
- The client cannot manage his/her own checkbook, financial affairs or other personal matters.
- The client appears to be concerned or confused about missing funds in his/her account.
This is not a complete list. There may be other signs of diminished capacity. If a client is exhibiting these or other behaviors related to diminished capacity or financial exploitation that raise concerns, you should discuss those concerns with IFP Compliance at 813-341-0960 or email us at [email protected].
Posted by: Tim Moyer | July 5th, 2018 at 9:10am.