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.