In the years that I have defended broker-dealers and investment advisors from customer-initiated complaints, a common theme has emerged. The bulk of the complaints seem to come from older clients. Unfortunately, the aging baby boomers may exacerbate this issue.
In a recent Investment News article by Mary Beth Franklin, she reported on a recent study reflecting that the number of Alzheimer patients is expected to triple by 2050. She noted that one of the first skills to go is the high-level function required to perform financial tasks like reviewing account statements. The article further noted that the aging population and the move toward a uniform fiduciary duty standard will only make this issue even bigger.
So how can you protect yourself from the pitfalls of an aging client base. Ms Franklin noted a number of worthy action items, including:
- Having the client update estate and legal documents (like a power of attorney).
- Encouraging your clients to seek timely medical care.
- Assisting your clients in selecting a worthy advocate in the event the client becomes incapacitated.
- Building a relationship with that advocate.
- Focus your clients on developing a plan for the future.
The key takeaway is early intervention. Do not wait until your client is incapacitated to plan for the future. At that point, it is likely too late, and you have set yourself up for a claim in the future. Act now, or pay the price in the years to come.
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