“I want to get to know a family member or friend of a client early on,” he says. “It should be clear what their role is and what information I can share with them.”
Leslie Thompson, managing principal at Spectrum Management Group in Indianapolis, says the client and advisor should agree ahead of time who the advisor can reach out to and what she is allowed to discuss. “It is also our obligation to reach out to authorities if we suspect elder abuse,” she says.
Transamerica takes the issue of aging clients so seriously it has prepared a pamphlet in conjunction with the MIT AgeLab, The Advisor’s Guide to Financial Planning in the Shadow of Dementia.
“It is imperative to understand your client’s wishes and how to ensure they are fulfilled,” Transamerica says. “This can involve legal arrangements that people with dementia make with their families. Knowing your client’s intentions about care, living arrangements and desire to protect income for other family members will better prepare you to design an effective plan.”
“Alzheimer’s and dementia pose significant legal and ethical challenges to a financial advisor,” adds Dave Paulsen, chief distribution officer at Transamerica. “Getting a client advocate involved and ensuring proper documentation of the meeting are key steps and best practices when working with these clients.”
The earlier arrangements are made with a client, the better.
“Firms should have a permission form that says who you can reach out to, along with the power of attorney and the emergency contact,” says Alex Papadopoulos, an advisor with IHT Wealth Management in Chicago.
“There may even come a time when the client needs to have someone else sit in on meetings and if he or she is not comfortable with that, the relationship with the client may have to be terminated,” Papadopoulos says.
There are lines the advisor should not cross, according to Jeanne Smith, president of Marca Life Planning in Birmingham, Ala., a member of the SEI Advisor Network. “There are three stages of retirement: the active, the passive and the care stages. The best thing you can do for a client in the passive stage is to prepare for the care stage.
“But do not do things you are not trained for. We cannot diagnose clients. We can act as a quarterback and call in other specialists when needed,” she adds.