Most advisors, Hutchins said, focus more on financial retirement concerns and overlook the more sociological issues. Financial gerontologists see issues “holistically,” she explained.
Research indicates that financial gerontologists do a more thorough job of considering caregiving issues, including planning for their own caretaking needs or taking care of an aging parent or spouse that may have faced catastrophic health issues, she said.
Financial gerontologists are trained to look for financial irregularities," she said. "For example, a retired client that withdrew $500 a week from their ATM and suddenly was taking out $5000 a week could indicate elder fraud or cognitive decline."
“We need to educate advisors. This isn’t something they sense intuitively. They come from a financial viewpoint, not a more psychological one,” she added. "All we’re looking to do is to equip them with the skills and knowledge to ask the right questions.”
Rosanne Roge, the managing director of R. W. Roge & Company, a fee-only financial planning and wealth management firm in Bohemia, N.Y., gained her financial gerontology designation from the American Institute of Financial Gerontology in 2005. She said gaining this expertise was critical because though clients are living longer, “cognition tends to regress with age.” Hence advisors must help clients “navigate the water of all these issues they experience through life as a family including aging in place, maintaining independence and stability, end of life wishes.”
Roge sees money and investing as one component of financial planning, and these kind of mental health issues cover a host of other issues, such as long-term care costs, having difficult discussions about driving, gaining assistance in the home or remaining in a social stimulating environment if one spouse dies prematurely.
Rising healthcare costs have become a major piece of the financial planning puzzle, particularly with older clients. “With costs increasing exponentially, it’s important to be able to guide them through the maze of different types of plans or refer them to a specialist in this area,” Roge said.
The study of financial gerontology isn’t new. In 2008, the TIAA-CREF Institute published a financial gerontology study that mapped out a direct link between a population that is living longer to planning family wealth. It centered on family aging and the interactions between 60-year-old children and their aging parents.
It acknowledged that most financial advisors trained in hard numbers and analyzing retirement investments might view some of these concepts as “soft.” But it noted that financial advice revolves around “relationships, and with older and middle-aged clients, the relationships go beyond portfolio growth.”
It also noted that in 1900 only 7% of 60-year-olds had a surviving parent and by 1990 this number had grown to almost 50%. Since life expectancy in the U.S. is now 79.5 years old or nearly 80, financial gerontologists make sense.