“The hardest thing for the client in the beginning of dementia is to give up driving and give up control of the finances,” says Thompson. “In this case, with the approval of the family, we let the client continue to pay the bills, but we could see her bank account activity. Her children were rather disengaged, so the responsibility fell on me.
“It would have seemed like punishment to take control of her bills away from her, so we let her do it as long as possible. We met more often and watched the accounts,” she adds.
Advisors need to watch the client: Is she asking more questions than usual? Is she confused? Are a different amount of checks being written? These can all be red flags to the advisor who knows his clients well, Thompson says.
There is a window of opportunity after a client first starts showing signs of dementia when an advisor can help him or her prepare for the uncertainties of the future and bring in advocates to help, according to Tom West, senior associate with SEIA, Signature Estate & Investment Advisors in California and Virginia.
“All of the client’s assumptions about the future are in a state of flux and have to be re-examined,” West says. “I try to see that the person has an income stream for life or insurance that will cover their new needs. The problem for the advisor is that we are grappling with the balance between our client’s safety and the liability associated with their privacy rights. There is no clear consensus yet on how to navigate that.”
One thing that can be taken care of ahead of time is determining how to pay for long-term care if dementia is a possibility for a client, says Tony D’Amico, CEO of The Fidato Group in Strongsville, Ohio, outside Cleveland. D’Amico learned during a routine meeting with a client couple that the husband was beginning to experience periods of forgetfulness and that he had a history of dementia in his family
“He did not qualify for long-term care insurance, so we decided to self-insure, and thankfully they did so,” D’Amico says. “A few years after that meeting, the husband suffered from complete dementia and had to enter assisted living. The wife already had power of attorney and could handle the medical and financial decisions that had to be made.”
Because the number of older clients is growing, more education programs are being developed to help financial advisors. Kathleen Hastings, portfolio manager at FBB Capital Partners in Bethesda, Md., is a Chartered Advisor for Senior Living, a designation developed by the American College.
Advisors should watch for clients who become agitated or fearful. They may become afraid to make decisions, but they do not want others to make decisions for them. “Have a plan of action in place ahead of time and put it in writing so you know what to do in these situations,” says Hastings.
Know how you as an advisor can help with medical claims, bill paying and protection from fraud, she adds. There is a psychological aspect to this area of financial advising, and Hastings says she has worked with a geriatric care practitioner in many instances.