Financial advisor Leon LaBrecque once had an older client who started yelling at him during a meeting, accusing LaBrecque of stealing his money.
LaBrecque found himself in the awkward position of trying to calm the client, who saw LaBrecque as the enemy. His staff called the client’s wife, who came to get him.
Although unusual, these types of unpleasant situations are becoming more common as financial advisors’ clients age and some clients begin to suffer from dementia.
What should the advisor do in these cases? What can the advisor do without crossing lines that could put him or her in legal jeopardy?
LaBrecque, CEO of LJPR Financial Advisors in Troy, Mich., says he is fortunate to have a good staff to help him deal with clients who are having cognitive problem by documenting what is going on and getting help when it's needed.
At least 5 million Americans suffer some sort of dementia, including Alzheimer’s disease, and the number will continue to grow as the large wave of baby boomers age, according to the Institute for Dementia Research and Prevention.
The first consideration, according to a number of advisors, is to protect the client’s privacy.
“If you are proactive as an advisor, you do not have to worry about crossing over any legal lines or violating the confidence and trust of a client because you will be prepared for this,” says Canon Hickman, a wealth manager with Equity Concepts LLC in Henrico, Va.
“You can communicate with the client’s lawyer or power of attorney, but you also have to be careful; giving out personal information is not something you want to do lightly,” he adds. “You want to tell your OSJ (Office of Supervisory Jurisdiction) that you are encouraging the client to bring someone else to sit in on meetings. You want to show you are trying to do what is best for the client to assure the right decisions are made.”
Each firm should have someone designated to respond to clients who are exhibiting signs of dementia, says Steven Starnes, senior financial advisor with Grand Wealth Management LLC in Grand Rapids, Mich.