[There is no greater value proposition and competitive positioning for financial advisors than to be prepared to help clients through their greatest financial AND life challenges. This is especially true as the two are inextricably linked where a client’s personal and family situation may harbor any number of hidden threats to a secure retirement. Helping provide guidance and chart a course through not just wealth accumulation, retirement planning and estate planning but also looking for any unforeseen or unaccounted for financial planning disruptions are critical — like supporting your client or their family member in the throes of opioid addiction.
This more diligent approach requires the financial advisor to be more proactive and it begs the question of how well you really know your clients. The common industry standard of “Know Your Customer” needs to be applied at a deeper, more comprehensive level because there can be serious implications in not identifying any destabilizing or challenging issues within the household.
This kind of holistic financial planning and wealth management service though requires specialized knowledge and resources that need to be compiled and integrated into your wealth management services toolkit through topic experts acting as strategic partners to your firm.
To learn more about these specialized resources and training available for advisors to help their clients and their family members through opioid addiction, we reached out to Cheryl Canzanella, a CLU (Chartered Life Underwriter), LUTCF (Life Underwriter Training Council Fellow), ChSNC (Chartered Special Needs Consultant) and founder of Coastal Life Strategies, who’s personal experience of losing a husband to an accidental opioid overdose led her to become a leading advocate for opioid addiction resources, training and support. She has created courses for financial advisors that fills this specific knowledge gap and equips them to know how to spot, advise and protect their clients’ well-being.]
Bill Hortz: What do we have to understand about the opioid epidemic and its impact on families and our communities?
Cheryl Canzanella: We often associate addiction with poverty and think this does not affect my clients, but this could not be further from the truth. According to the Pew Research Center, almost half of Americans have a family member or close friend who has been addicted to drugs. And it is happening at alarming rates, yet it is a topic that rarely comes up in conversation. How can we effectively assist our clients if we are not aware of the struggles they may be facing?
Without proper planning and guidance, costly and irreversible mistakes can be made. A legacy could unintentionally be passed to heirs who could use them to their detriment. Reckless spending can quickly build beyond control, assets lost, and savings, college, and retirement accounts can be wiped out without adequate time to recover.
The impact extends far beyond what many might realize. Addiction is a massive $1 trillion financial strain on our economy that trickles down to our local communities. From increased healthcare costs, decreased workplace productivity, greater demands on social services, to increased crime, and costs associated with treatment and rehabilitation centers. It is important to know that financial advisors and the firms they work for can and should play a part in this epidemic by helping safeguard clients' financial well-being and providing support.
Hortz: What kind of financial threats can happen as a result of opioid addiction?
Canzanella: Money can buy a lot of things but one thing it can never offer is immunity to addiction. In fact, money can often fuel addiction and create a devastating cycle that impacts the wealth and security of families for generations. Families tend to take on the financial responsibility of an addicted family member and can quickly drain bank accounts and derail their retirement. Parents allow children to live with them while trying to get “back on their feet.” They pay for lawyers or post bail if legal troubles start.
Personally, my husband, who was suffering from opioid addiction, and I made very poor decisions with our money. We could not control our spending and had absolutely nothing saved for emergencies. And forget about saving for retirement…we lost years of contributions and compounding. It was so difficult to navigate insurance that we paid out over $10,000 out of pocket for less than 28 days of treatment. Honestly, I was not thinking clearly and could have used some advice and direction.
Add in that many can eventually face bankruptcy with the need to sell assets, experience financial fraud, legal expenses, and the cost of treatment which can easily compound these financial threats.
The consequences can have a lasting impact on families and their future financial security, yet the shame and secrecy of addiction cause many families to hide its true costs.
Hortz: What type of risks exist for advisors and financial firms in not addressing this epidemic and these client risks?
Canzanella: Advisors help clients through many life crises such as a family death, divorce, caregiving, job loss, illness, disasters, identity theft and fraud. Dealing with addiction in the family is just as complex and can take a toll on emotions and disposition, disrupting lives and making it difficult to think clearly and strategically. Financial issues often get pushed into the background as an afterthought.