Longevity is one of the greatest achievements of our modern-day era. Many older clients are leading long and active lives due to medical advances, improved health care and better lifestyle choices. However, with the benefits of longevity also come some risks—including diminished cognitive capacity. In fact, according to the Alzheimer’s Association, the greatest known risk factor for Alzheimer’s disease is increasing age. 15 percent of Americans over the age of 65 have some form of dementia and by the age of 85 that number can grow to as high as 50 percent. Given these statistics, it is essential for advisors to understand the key differences between “normal aging” and cognitive decline because they can be the key to developing and maintaining a multigenerational client pipeline.
Understanding Dementia
Dementia is the name we give to the range of symptoms related to memory loss and decline in cognitive skills that affect a person’s ability to function. All too often dementia is written off as “just getting old.” While shifts in cognition can be part of the normal aging process, when the mind declines faster than the body it can lead to diminished capacity.
Many cases of dementia are due to Alzheimer’s disease, which is the most common form of dementia. However, there are other conditions that can contribute, so recognizing the symptoms and getting a proper diagnosis is critical.
How To Tell The Difference Between Aging And Dementia
Occasional memory lapses are not uncommon—and something many experience them when quite young. For example, clients may experience:
• Trying to recall something that is on “the tip of your tongue”
• Calling a family member by the wrong name
• Forgetting where you left your glasses or keys
• Occasionally forgetting an appointment
• Walking into a room and forgetting why you entered
When forgetfulness begins to affect daily functioning, performance or safety however, there may be more going on. The following are cognitive lapses that are not a normal part of aging. And while these may seem minor, it is important to note that dementia is progressive.
The goal is not for a financial advisor to diagnose the conditions, but rather proactively plan to address issues of incapacity. Recognizing early signs is a vital part of managing or treating symptoms.
Signs Of Mild Cognitive Impairment
• Unable to recall or repeat words that were said moments before
• Unable to identify family members
• Unable to clearly discuss or manage finances
• Frequently losing or misplacing several items
• Difficulty following and responding to a conversation
• Disoriented as to the day, month, season or year
• Unable to recall a whole event, such as a family trip
Advisors And Cognitive Decline
Financial advisors are typically on the frontline of cognitive decline—often noticing symptoms years before a diagnosis. Yet, despite the frequency that these issues impact older adults and their families, many are ill-equipped to address it. These cognitive changes can not only affect financial literacy and decision making, but also can wreak havoc on family dynamics and relationships if not addressed well in advance.
When it comes to aging management concerns, clients drop hints throughout their interactions with financial advisors. Some cues you should consider are:
• “I want to stay in control and make my own decisions”
• “I don’t want to be a burden to my children”
• “My mother should not be driving”
• “I need to understand Medicare and supplemental insurance coverage”
Encouraging your clients to establish an elder-care plan in advance provides them with a sense of control over their future and supports their desired independence. Advance planning and early conversations are especially important for people with dementia because the gradual loss complicates decision making as the older adult continues to age. The onset of this condition can manifest itself in many ways, and difficulties with managing finances, making decisions and bouts of uncertainty are often common.
The capacity to make one’s own decisions is fundamental to the ethical principle of respect for autonomy and is a key component of informed decision making. Determining whether a client has adequate capacity to make decisions is therefore an inherent aspect of protecting the family. In the presence of dementia, determining whether a client has adequate capacity is critical to striking the proper balance between respecting client autonomy and acting in a family’s best interest.
By helping to proactively navigate the challenges of dementia and elder care before they become a crisis for the client and their family, financial advisors have an opportunity to further develop trust and confidence while deepening existing client relationships. Elder-care planning also engages the next generation prior to wealth transfer. This multi-generational approach can educate families in sustaining wealth across generations. Elder-care planning truly adds value when a client is at their most vulnerable.
Five Steps For Advisors
Financial advisors who notice any signs of cognitive impairment when meeting with clients should consider the following:
1. Reach out to the next generation in line for succession, executors and/or the designated emergency contact to discuss the matter and concerns. Are they too noticing changes in behavior?
2. Invite additional family members to client and business meetings and document discussions. These can be important to protect families against any risk of financial abuse.
3. Recommend families contact a doctor for a proper diagnosis. Early diagnosis is critical and can improve brain function, reduce symptoms and slow down the rate of decline.
4. Partner with subject matter experts on the condition to offer the necessary services, resources and support to help the family best cope.
5. Proactively plan and document a family’s care wishes while your client can still make sound decisions.
Dealing with this type of situation can be difficult for any financial advisor. It not only requires compassion and commitment, but an understanding of the progressive nature of the disease and the importance of acting quickly to support and safeguard a family’s wealth. Financial advisors that can help families navigate this difficult and often debilitating process will provide an immense benefit to all involved while deepening their personal relationship as a caring professional with multiple generations.
Joanna Gordon Martin is the founder and chief executive officer of Theia Senior Solutions, an integrated elder-care platform and consulting firm that helps advisors and families navigate the complexities of dementia and elder care.