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Client with dementia? 5 steps to take

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Let's say your client is an older gentleman -- and his adult daughter tells you that he has recently been diagnosed with dementia, and asks you to help in some undefined way. You may immediately think, "This is their problem; I just manage the money." But is that a safe way to treat a multimillion-dollar client --particularly one you've known for decades?

As an attorney, health care professional and now consultant to the financial services industry, I think financial professionals can no longer just hope the issue will go away. How many frustrated family members are going to take aging clients' assets away from your management because you don't know what to do and aren't willing to get out of your comfort zone to protect a vulnerable client?

Advisors need new knowledge and communication skills to best manage the aging investor population.


Here are five steps you can take to be prepared for the coming age-wave:

1. Get smarter. Learn the basics about dementia and Alzheimer's disease -- the most common form of brain disease that presents as dementia. Understand the fundamentals and the red flags. Be willing to have the discussion with your client and any concerned family member. You are in a position of trust. They expect you to care about this problem.

2. Have a Plan B contact. Obtain a special, institution-specific privacy waiver so that you have your clients' permission to speak with whoever they appoint to watch over their finances -- because any client with dementia will ultimately lose the capacity for safe financial decisions. Do this when all of your aging clients reach a specific landmark birthday, such as 70, or when they retire. Don't wait until they show obvious signs of impairment; it may be too late at that point to get a legally valid signature on such a document.

3. Keep close ties. Set up regular meetings, starting at the first time you learn about a client's dementia or when you observe signs of it yourself. A transition of power is going to be necessary and will be driven by the progress of the disease. If the legal paperwork allowing a family member or other to take charge is in place, ask to see it so everyone is on the same page. These meetings will help you facilitate the transition and involve your aging client for as long as possible. It will also educate the appointed person who will need to learn the ropes.

4. Create a resource list. Get some basic information about what resources exist in your community (or online) to help with the changes your clients will be going through. The Alzheimer's Association, for example is a worldwide online resource for families and has a great deal of educational material as well as support groups for families. Local helpful organizations exist as well. Become familiar with some of them and be able to offer lists, booklets or other materials to help your clients and their families.

5. Watch for abuse. Learn about financial elder abuse, which is a looming risk for anyone with cognitive impairment. Protecting your client from con artists, thieves and scammers should be part of your fiduciary mindset. You can make a difference if you are willing to pay attention, ask the right questions and know how to make a useful report to Adult Protective Services. You won't be prosecuted for making a mistake if you have reasonable suspicion of abuse.


Forecasts predict that by 2030, there will be 7.7 million people in the U.S. with Alzheimer's. That suggests a large number of impaired clients making or attempting to make financial transactions and decisions -- and some of those transactions could be with you.

It's time to step up and learn the so-called soft skills you need to handle a potentially impaired client with grace. This increases your chances of keeping the client. You need to know how to achieve the transition of power correctly, and be in compliance with all privacy regulations.

These matters affect everyone, not just those who are caregivers, health care providers or someone else. They affect every person who is managing assets for an aging individual or who is potentially selling any financial product to an aging person. Think proactively about the potentially devastating effects now -- and take the steps you need to shore up your skills now.

Carolyn L. Rosenblatt is an RN, an attorney and a consultant on aging issues at AgingInvestor.com and AgingParents.com.

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