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Circle of Care for Aging Clients: An interview between a professional trustee and an investment advisor

Professionals that interact with their clients regularly, such as investment advisors and tax preparers, can often see the decline over time that can come with dementia. We wanted to interview a trusted advisor, Ian Castille, CFP®, Senior Financial Advisor at Capital Advantage, Inc., to find out how his firm can be a safety net for aging clients.

Loren: Ian, when an investment advisor begins to notice confusion or memory loss in clients, what are some ways they can begin a dialog with their clients about this sensitive subject?

Ian: Many people experience moments of forgetfulness or disorganized thinking at various times in their lives. Since I am not a doctor or an attorney, I am not able to determine if a client has lost capacity. Typically, if our advisors notice continuing signs of disorientation, confusion, or memory loss about significant facts we will ask if there is any stressor in the client’s life. If the pattern continues, we train our advisors to express concern to the client about their wellbeing. Many times, we may ask if there is a trusted contact they would like to bring to an investment review meeting with them. We also request contact information for trusted contacts at the onset of every client relationship and make best efforts to reconfirm the trusted contact(s) annually.

Loren: Yes, while we are not doctors, it is important to understand the signs of dementia. As our client base ages, it is likely that we will be faced with the dilemma of how to deal with a client who is exhibiting signs of dementia. Americans are living longer and healthier lives than ever before. Yet with age the odds of cognitive decline increases. It is estimated that 1 in 6 women, and 1 in 10 men, who live past the age of 55 will develop dementia in their lifetime ( Dementia, most often thought of as a memory disorder, can range from mild to severe cognitive impairment. Confusion, memory loss, poor judgement, and diminished ability to deal with financial issues may all be signs of dementia. At what point do you sound an internal alarm and consider taking action to protect your client’s assets?

Ian: If we see a number of large, unusual withdrawals or trade requests, we will reach out to talk with the client. We are looking for signs that they might need help. Since there are many complexities and compliance considerations involved in dealing with the situation of a client with dementia, we have developed a plan within our firm to support the client’s financial resources while staying within the bounds of our job as an investment advisor. Most investment firms have privacy rules in place which can at times make it more difficult to get a client the help they seem to need. So, it is crucial that our advisors have a clear understanding of the regulatory rules and what we can and cannot do as an investment advisor.

Loren: I know that one of the tenants of financial advisors is to “know your client”. How do these types of policies help your firm avoid losing a valued client to dementia?

Ian: We regularly go over our client’s estate planning documents. We ask clients to update the trusted contacts–family members, fiduciary, attorney, accountant, or close friends–that we can contact in an emergency.

If we see troubling behavior, we will express our concern to our client and suggest that for their well-being they may want to contact their doctor. It is not always easy to talk about health issues with clients, but our whole-person planning approach allows us the opportunity to talk about health concerns that might have an impact on their progress towards their financial goals. A client who obtains an early medical diagnosis of dementia can be more involved in decisions for their future, such as updating any estate documents to name an agent of their own choosing, plan for healthcare needs and to make arrangements for finances and property.

Loren: Your last point is really important because people who have faced any type of health issues directly, will be better prepared and able to pro-actively seek the kind of support they need.

It is helpful for people as they age to put in place a “circle of care” of trusted advisors which includes their investment advisor, tax professional, and anyone who is named as their agent; as well as medical personnel in case of diminished capacity. This will help avoid the stress that comes with decisions made by strangers or court actions that are out of their control. While we cannot predict the future, we can prepare with a team of trusted advisors available to help if needed.

Disclaimer: The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

Source:  Emmanuel, Loren. Don’t Lose Your Valued Client to Dementia. July 12, 2021.

Author Profile

Ian Castille

The Author: Ian Castille

Ian is a Principal and Senior Financial Advisor at Capital Advantage, as well as a CERTIFIED FINANCIAL PLANNER™ (CFP®) and an Investment Advisor Representative. He is part of the investment committee, and is responsible for developing and maintaining client relationships, designing financial plans, and managing investment portfolios. Ian specializes in helping his clients navigate the financial transition to retirement. His work includes personalized strategies to reduce taxes, make smarter investment decisions, and optimize income streams. As an advisor, Ian believes his job is to bring peace of mind by providing financial clarity for his clients.