Seniors exhibiting signs of diminished mental capacity are one of the most troubling and sensitive issues financial professionals 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 financial professional, 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]. Client Retention Through a Transition Publish Date; 7/9/2018 Author: Ned Van Riper

Video Transcript

When I work with financial professionals, especially wirehouse financial professionals that consider breaking away from their firm, they always ask me about client retention. What drives client retention during a transition?

In my experience, the answer is simple: it’s the financial professional’s service model. Meaning, how often do they meet and speak with their clients? And the answer to that will drive client retention. With strong client relationships, client retention is often 75% or more during a transition. Often times it’s within 90 days of a transition.

Horror Stories

We’ve all heard horror stories about the lone financial professional that made a move and didn’t bring any clients with them or a very low percentage of his or her book during a transition. I think that’s probably happened and if so it’s likely because they didn’t serve their clients. With that said, I think it’s become more of an urban legend within the industry and it’s just a scare tactic and fun to talk about.

But leaving a brand name firm may not be a big deal when the relationship exists between the client and the financial professional. It’s not between the client and the firm. So, if as a financial professional you have a very strong client service model, there’s a good probability that many of your clients will come with you.

A True Story

Many years ago, I helped a financial professional in Cleveland, Ohio move his practice and he tells a great story about client retention. He segmented his book – A, B, C and D, as most as financial professionals do – and the A clients received absolute white glove treatment. He wanted to do whatever it took to get those clients, his best clients, to move with him. His B clients received just one notch under the A clients. Pretty much the same great service and attention. And his C and D clients received communication, a couple phone calls about his move, but if they didn’t respond to him, he didn’t bring them with him. After his move he said he was more efficient and more profitable than he ever has been in his business life and he was very thankful for it. Every story is different, but this illustrates one potential scenario.

Thank you for checking out this entry into our recruiting series and we hope to see you next time.