Clients' Cognitive Decline Should Be Considered Early And Often

Cognitive decline is the elephant in the room with many aging clients, but it doesn’t have to be. Advisors should broach this topic as soon as possible with all clients to make sure they’re prepared financially and have a transition plan that can be activated if at some point they can no longer manage their own finances.

This is one of the many health-care-related messages that financial planner and physician Carolyn McClanahan has been delivering to advisors and to her clients.

“Nothing operates in a vacuum in our lives,” says McClanahan, the founder and director of financial planning at Jacksonville, Fla.-based Life Planning Partners Inc. “Health and finance are so intertwined.” You don’t have to be a physician or any kind of medical professional to ask health-related questions, she adds.

Multiple studies show a link between aging and cognitive decline. Medications can also interfere with older people’s thinking skills.

Cognitive decline is also one of the topics addressed by Whealthcare Planning LLC, a new health and eldercare financial planning software platform. Chris Heye, who co-founded Whealthcare Planning with McClanahan, worked with Massachusetts General Hospital to develop a cognitive decline tool, including a quiz, that’s part of the software’s risk profile module.

When it comes to testing new resources, McClanahan’s clients “love being guinea pigs,” she says. But a number of her male clients over age 70 refused to take the cognitive quiz. The elderly often don’t want to know or admit they have cognitive decline.

McClanahan was particularly concerned about a couple in their mid-70s who are long-term clients. The husband is the couple’s financial caretaker and budgeter. After he called her office a couple of times to ask the same questions, she told his wife she was worried about him. His wife responded that she was worried too.

The husband originally refused to take the cognitive assessment. McClanahan, with the wife’s approval, then told him she wanted him to help her test the software because she’s interested in using it with all her clients. He agreed to take the quiz and his cognitive profile results came up “yellow,” indicating he could have some diminished cognitive capacity.

McClanahan told the couple she was a little concerned. “This could be normal cognitive decline or it could be dementia, she explained to them. “We don’t know.” She then encouraged the couple to have the wife play a bigger role in managing the family finances. She helped the wife get up to speed on reviewing the couple’s bills and balancing their checkbook.

McClanahan also conducted a family meeting with the couple’s children and helped her clients put a caretaker agreement in place. It’ll give the children permission to see everything pertaining to the couple’s estate should their mother’s health decline.