Dementia is a difficult subject to bring up with clients, but few advisors have had a wake-up call like Deborah Juran did -- one that had a policeman on the other end.
“My client had committed suicide and the only identification on him was my business card. So the police had no one else to call,” said Juran at the Senior Investors Forum sponsored by the Securities Industry and Financial Markets Association (SIFMA). The number of Alzheimer's patients in the U.S. has reached six million, learned attendees.
A somber Juran, who spoke on a panel on "Communication with Clients on Diminished Capacity Matters," described the impact she felt at knowing he had held her card in the midst of a fatal crisis. It drove home what she calls the “sacred trust” given to advisors. And, it underscored for her and her fellow panelists the imperative “to focus on the client not the investments.” Juran is senior vice president and financial advisor in the senior consulting group at RBC Wealth Management.
That focus includes watching out for the early signs of diminishing capacity before it can burst forth.
Such was the case when a family member called reception at financial planning specialist Emily Boothroyd's firm, Westport Resources, to say the client was acting bizarrely; ordering dessert for grandchildren who weren't present and, other times, tipping the person delivering her Chinese food $200. Fortunately, the firm trains even the first-line-of-contact employee to recognize and elevate such situations to more senior personnel who know how to respond to these red flags, said Boothroyd, J.D., CFP and CDFA.
Early steps she has taken include arranging family meetings as soon as possible and “knowing the family dynamic,” she said. Most of all, certain basics “must be talked through while the client is still lucid.”
“Almost everyone with clients in their fifties and sixties have had or know of someone who's dealing with Alzheimer's or diminished capacity,” said Juran. “But now it's reached a crescendo!”
The number of Alzheimer's patients in the U.S. has reached six million, learned attendees. It is a cruel combination of events, Juran noted, that at this point of mental vulnerability, some people are confronted with more complexity and urgent decisions than they've encountered to date. Finances may be getting depleted, which can necessitate the sale of the home. Juran had a client who, unbeknownst to her, suddenly put his house on the market. He wouldn't give her permission to bring in an appraiser, yet “had assets scattered everywhere.” The assets were exposed to members of the public walking through the home. This, she said, is when it may be necessary to be “forceful for the good.”
Advisors can detect early slippage, said Juran, by being mindful of a “client's interests waning or their level of engagement being less than historically.” This is when developing a rapport or collaborative relationship with the family attorney – “without overstepping our area of expertise” -- can help, she said.
Often one spouse is aware that the other is losing his grip. “Sometimes it's an active deception,” said W. Barton Close, CFP, and senior vice president, investments at Raymond James and Associates. “One may not want to tell you the other one is losing capacity.” In one situation, Close said, the person losing control was the one who handled the money. “But I noticed he didn't seem to have a grasp on his finances.” That's when the value of being known to whole family groups becomes obvious, said Close, who communicates by sending them birthday cards and occasional letters and having gatherings.
Panel moderator, Steven M. Samuels, MD, client segments and advisor development for Merrill Lynch Asset Management, asks clients, “Who do you want to share your information with?”
“Visit the client at home,” said Boothroyd. “Create deeper relationships by having coffee with the daughter.” And, make sure to ask the family member, who's been asked, how they feel about executing the living will or the duties of power of attorney or executing the final will, she said.
Amy Daniels, a financial advisor with Edward Jones, finds going to the core of the client can establish a deeper relationship from the start. “I like to ask: What's your family core value?” Daniels distributed a booklet she asks clients to fill out, before they can lose lucidity. “I like to be ahead of the storm, not reactive to it."