Whether you're an advisor occupying a lofty suite on Wall Street or working with elderly clients in a small Main Street office, the opioid crisis might seem like a distant problem.
But for millions of Americans, the rising levels of addiction, dependence and overdoses hit very close to home, and advisors should be taking notice of the problem, said Bill McManus, director of strategic markets at Hartford Funds.
Moreover, advisors may be able to recognize the signs of addiction in their clients and their clients’ families, he said.
“Financial advisors have a unique lens into their clients’ lives due to the personal level of their conversations and the relationships they build,” said McManus. “They have the ability to affect their clients’ lives and behavior, but the may not know how to handle these situations.”
The opioid crisis is no longer just relegated to opium dens and dingy hovels packed with heroin users, he said. The problem accelerated as health-care providers began prescribing synthetic opioid painkillers in the 1990s under the assumption that they were not as addictive as heroin and other recreational street drugs, he said.
Today, two million Americans are addicted to opioid drugs, exposing hundreds of millions of relatives, friends, neighbors and employers to the crisis.
“It’s had an impact on national life expectancy,” said McManus. “After decades of life expectancy going up, over the last few years it’s gone down almost entirely due to this issue.”
McManus cites statistics from the Centers for Disease Control that show up to 29 percent of patients prescribed pain killers misuse them—and that 80 percent of heroin users first abused an opioid medication.
Stronger opioids, like Fentanyl, continue to make their way into the black market, causing a dramatic rise in overdose deaths. While the CDC recorded just over 47,000 opioid-caused deaths in 2014, that number jumped to more than 72,000 in 2017.
McManus offers five pieces of advice for helping clients deal with opioid abuse—whether it is themselves or a family problem who is battling the addiction.
1. Be non-judgmental.
Advisors and their clients need to remember that opioid addiction is not a moral failure, but a disease, said McManus.
“This can affect anybody—anyone who has had a back issue or a surgical recovery,” he said.
Most opioid medications are legal and prescribed for legitimate medical purposes, but it’s very easy to become addicted to them. Addiction does not discriminate by age, gender, race or socioeconomic background.
In fact, some of the epicenters of opioid addiction are well-to-do suburbs where young adults and teens often have the time and financial resources to experiment with drugs. High-income users often have the ability to support their habit and hide it from those around them for long periods of time.
“It might not be a client specifically, but a family member that could have more access to money and a higher likelihood to encounter the drugs,” said McManus. “These relatives have the money to continue to try to experiment with these types of things.”
Advisors should exercise empathy when dealing with clients and client households struggling with an addiction, said McManus.
2. Educate yourself on opioid addiction resources.
Individuals and families dealing with addiction need a lot more than financial advice. Advisors should have general knowledge of the counseling, detox and rehabilitation services available to their clients and preferably establish relationships with providers.
“We don’t think that advisors need to dramatically reshape their practices or learn everything about this, as long as they have an awareness and an understanding,” said McManus. “That way, if they do encounter a situation, they can connect people to resources that can help them.”
3. Identify red flags.
Advisors should be on the lookout for erratic spending, unusual changes to accounts and clients who tap into their retirement funds prematurely or take on additional debt for no apparent reason.
“There are also certain cues in a one-on-one situation that an advisor might be able to recognize,” said McManus. “Little signs that things are not exactly right. The one area they typically have access to, regardless of client or firm, is finances. Keep a close eye on withdrawal and spending patterns. We tend to be creatures of habit. If things suddenly change, the advisor should take notice.”
Another trigger for drug abuse is changes in family structure. Issues like divorce or a child moving back home with their parents may indicate that a client or their family member is dealing with addiction, particularly if these changes happen abruptly.
Relatives of opioid users may experience financial abuse and exploitation as a child, sibling or spouse looks for resources to support their addiction. But withdrawals may be small and spread out over time, as those suffering from addiction may go to great lengths to disguise their habit.
4. Initiate the conversation.
McManus stops short of saying that advisors should take it upon themselves to lead an intervention for a client or a client’s family member, but the topic should be brought up.
“Clients can be caught off guard. They might feel like there’s a violation of their privacy or a sudden awareness of a moral shortcoming. It can be a striking experience,” he said. “I think it's more of a conversation initiation than an intervention. Advisors should be careful.”
It’s critical for a financial advisor to be sensitive and avoid accusatory language. Phrases starting with “I am concerned,” “I notice” and “I can see” can help reframe the discussion in a non-judgmental manner.
McManus recommends that advisors use the same tactic when discussing potential enabling behavior or a client’s financial exploitation by a relative. Offering educational assistance, like directing a client towards legal, tax and rehabilitation services, may ensure a more productive conversation.
5. Help create a plan.
Assuming clients are receptive to the advisor’s conversation, the next step would be to help the client or household create a financial plan for recovery.
“This might be something to consider ahead of time as part of an overall health-care planning conversation,” said McManus. “It’s kind of planning for the unexpected. Advisors should have it in their mind that this is something they should at least be aware of, and if it does come up in a client relationship, they should already have a plan to address it.”
Recovery services differ widely—in-patient rehabilitation programs may be extremely expensive with costs rivaling those of long-term nursing care facilities.
Those battling addiction often relapse during the process, so creating a long-term financial plan to support rehabilitation and recovery is essential. Medicaid, Medicare and private health insurance typically offer only limited support for addiction services.
For clients dealing with relatives dependent on opioids, reporting suspected abuse may be part of the advisor’s fiduciary duty, said McManus. An advisor may have to leverage attorneys and other specialists to create buffers and boundaries within a client’s finances, prevent excessive spending and creating a distribution system for assets, like a trust.