If a financial advisor notices something out of the ordinary that could indicate an elderly client is being financially abused, he has a duty to report it to the proper authorities, say experts in finances and care of senior citizens.
Financial abuse of vulnerable older people is becoming a rampant and growing problem, they say. The vast majority (84%) says investment fraud and financial exploitation of American senior citizens by swindlers who target the vulnerable is getting worse, according to a new survey by the Investor Protection Trust (IPT).
"Elder abuse means not just physical but financial exploitation as well," says Kathleen Quinn, executive director of the National Adult Protective Services Association.
The IPT, a not-for-profit investor protection organization, conducted the survey of 762 financial advisors and other experts in the legal and law enforcement field. Nearly all (99%) say older Americans are very or somewhat vulnerable to financial swindles.
One in five of those over 65 have already been swindled says Robert Lam, chairman of IPT and acting chairman of the Pennsylvania Securities Commission. Lam and Quinn, along with Don Blandin, president and CEO of the IPT, and dr. Robert Roush, director of the Texas Consortium Geriatric Education Center, Huffington Center on Aging and Baylor College of Medicine, took part in a recent news conference announcing the results of the survey.
The number of elderly being defrauded is growing because the number of elderly is growing, financial products are becoming more complicated and older people now have more money. Also more cases are being reported because more people are on the lookout for fraud and exploitation, say the experts.
The IPT is conducting training sessions for medical professionals to spot impaired mental capacity that can leave seniors vulnerable to financial abuse. Roush adds that financial advisors who have clients of long standing should look for signs of change, like neglecting personal appearance or hygiene that can indicate impaired judgment.
Red flags that should trigger questions are catastrophic events like the death of a spouse or a client asking to change a will, change power of attorney or change life insurance. The IPT has a financial checklist that financial planners can use to know what to look for that is available on its website at www.investorprotection.org.
"We have begun to realize there is a neurological basis for seniors being vulnerable to financial swindles," Roush says.
More than half (58%) of the professionals surveyed say they deal with cases of investment fraud or financial exploitation quite often or somewhat often, according to the survey. Less than 7% say they never see such cases.
Nearly all feel the problem is very serious or somewhat serious. And most feel medical professionals can help spot the warning signs for potential financial vulnerability.
"The message from those on the front lines of investor protection is clear: Swindles targeting older Americans are a bigger problem today than ever before," Blandin says.
"That financial abuse of older Americans is rampant today is no commentary on seniors and their judgment; it is a simple medical fact of life that many older adults are highly vulnerable to being financial exploited," Roush added.