Regulators also want to see more altruism, and they have started making senior investors' potential mental impairment a high-profile talking point, calling on the securities industry to pay heed. "One of the most challenging issues facing firms today is seniors with diminishing capacity," says John Komoroske, FINRA's vice president of Investor Education, during a recent Web cast. "As people age, they sometimes reach a stage where they begin to have trouble understanding the full scope of financial products and strategies. It can simply be the result of the aging process or disease. This can happen even when dealing with long-term clients who have been active investors."

Realizing that a client has become impaired can be almost as frightening for the advisor as it is for senior clients. Armstrong has a male client who recently called the firm three times to ask the same question about his charitable remainder trusts-trusts she'd set up for him several years before. "He kept asking: 'Now tell me again why I did that,'" she says.

While FINRA has yet to regulate securities sales to seniors overall, they are watching for problems closely, says FINRA Senior Vice President Elisse Walter. It's important to base securities recommendations and sales "on current client information, particularly when working with senior clients," Walter says. "If a senior wants to do a trade that the firm or rep thinks is unsuitable, tell the client that the firm thinks it's unsuitable." The client's true state of mind and any diminished capacity "can only be known if reps concentrate efforts to know their customers and base any recommendations they make on current information."

Both Walter and Komoroske suggest that reps ask clients in early meetings if there is a secondary person to contact should questions arise about their health or capacity. Suggesting the client bring a family member or friend to join them at appointments at the firm can also help protect all parties. It's also important to find out if a client has a durable power of attorney, a trust or a similar vehicle that allows a spouse, children or caregivers to make investment decisions for them.

It's delicate work, but critical to helping clients protect themselves, says Ruth Forehand, a vice president at FAC Wealth Management in Naples, Fla. "One of the things that is critical if a client becomes incapacitated, especially in Florida, is having an explicit power of attorney. That's part of our due diligence process," Forehand says. "We want to know from clients: Who are the ones you trust the most? With these documents, we know who to call, where the kids are and how to get in touch with them."

To ensure the firm stays in touch with clients who seem vulnerable, Forehand or members of her staff call them monthly or even more often if their condition warrants it. "We especially keep in very close contact with our female clients who have become widowed. We had three in 2007. We make sure we have enough conversations with these folks to know if anything isn't right," Forehand says.

FAC Wealth Management also works annually to ensure that contacts, trustees and beneficiaries are up to date or at least simply still there, for the client to rely on.

"It's important to keep them engaged in dialogue when there is no crisis, and they can say what they want, so no one has to make these decisions under the gun saying: 'Oh my God, I have no idea what Mom or Dad was thinking about this.'"

Forehand also works closely with seniors who are single women or newly widowed to ensure they fully understand their financial, insurance and care options. The fact that they may have no one to turn to makes their care decisions even that much more critical.

"It's our job to be proactive. We don't run a relationship with clients where we're just money managers," Forehand says. "We're wealth managers and that encompasses risk management and the risk that someone might become mentally incapacitated."