Addressing Financial Advisor Clients Needs As They Age

Feb 26, 2019 Share This 

Needs_of_Aging_ClientsAbout 20% of people who are 55 years old or older have some type of mental health concern, most of which go undiagnosed.1 Further, an estimated 5 million seniors who are 65 years old or older have been diagnosed with severe cognitive impairment, commonly Alzheimer’s Disease.1 Given the aging U.S. population, these statistics may not be particularly startling; however, they should serve as a wake-up call for financial advisors.

The first Baby Boomers turned 70 in 2017 and another 1.5 million will follow suit every year for the next 15 years,2 so the odds are good that a number of your clients fall in this group. There is also a high likelihood that a certain percentage of them will encounter some degree of diminished capacity which could impact their financial decision-making. Since client-advisor relationships often span years, noticing shifts in client behaviors could be a tip-off that advisors need to adjust their approach to service. Yet, 96% of advisors feel unprepared to assist clients with impairments such as Alzheimer’s disease.3

Being aware of what to look for and practical next steps will help you be sensitive and responsive to client needs during what can be a difficult transition.

Signs of Potential Cognitive Impairment

Trouble handling finances or muddling numbers is often one of the first indicators of age-related cognitive impairment4 but it’s not the only one. Advisors should be familiar with other signs clients might exhibit, including:

  • Memory loss that may evidence itself in multiple phone calls to your office making similar requests, or forgetting appointments and recent events5
  • Difficulty comprehending basic concepts, including those they previously understood well5
  • Confusion about where they are or in their communication5
  • Unusual emotional distress, stubbornness, or inappropriate emotional reactions to situations (i.e., laughing at a sad situation, etc.)5

Advisor Action Steps

Experts caution that not all confusion may be attributed to age-related mental decline. Physical conditions such as hearing loss, for example, may make it difficult for some clients to fully engage.6 Jumping to conclusions about a client’s mental fitness may not be appropriate, but it’s important that advisors do not completely dismiss signs of new or escalating impairment. Advisor proactivity may prove crucial for engaging clients in finance-related information gathering, conversations, decision-making, and advanced planning:3

1. Verify and document the power of attorney (POA). This information is essential for eventual next steps.6

2. Reach out to your client’s immediate family or designated emergency contact. Ask if your client is experiencing any health-related issues of which you need to be aware. Consider sharing your observations so appropriate action can be taken by the family, if necessary.6

3. Invite your client’s family members to meetings in order to witness and document discussions and gain firsthand knowledge of your client’s financial wishes and decisions.3

4. Routinely meet with your client to draft/review/update financial plans and documents including power of attorney, durable power of attorney, standard will, living will/medical directives and trust directives.2

5. Build a professional network of experts who specialize in aging — such as elder law attorneys, geriatric care managers, behavioral specialists, etc. — who you could recommend as resources to your clients or their caregivers should the need arise.7

Aging is a natural part of life, and some of your clients may require additional assistance from you as they grow older. Being prepared to handle the tough financial conversations and necessary details is essential and will likely prove invaluable to your clients — and you. Aging may also stir up emotions that could cloud clients’ decision-making and impact their financial security if advisors don’t help them navigate their feelings. Learn more in Defusing Emotions: An Advisor’s Role in Disciplined Long-Term Investing. Click the button below to access your copy of this valuable eBook now.

Defusing Emotions: An Advisor’s Role In Disciplined Long-Term Investing


1A Place for Mom, 10 Symptoms of Mental Illness in the Elderly, May 15, 2018

2MarketWatch, The talks financial advisors need to have with aging clients—before it is too late, October 16, 2017

3MarketWatch, Opinion: 5 things a financial advisor should do when they see cognitive decline in a client, December 8, 2018

4Forbes, Understanding The Financial Risks Of Diminished Capacity, June 20, 2018

5Advisor Perspectives, How Advisors Should Address the Hidden Risks Facing Older Clients, February 26, 2018

6Investment Executive, Mental capacity: the advisor’s role, April 27, 2018

7Investor’s Business Daily, Before Aging Clients Show Signs Of Dementia, Advisors Take Action, April 27, 2018


Topics: Client Relationships