How to Help Protect Elderly Clients in Retirement from Financial Abuse

November 21, 2016

Read about financial exploitation of seniors and what you can do to help protect elderly clients.

Financial exploitation of seniors and other vulnerable persons is a type of fraud and abuse that is a growing concern throughout the financial services industry.

As a financial professional with elderly clients, you are often in a unique position to share in their personal and financial lives in their homes, as well as meet their closest loved ones and caregivers. During these visits, you are able to become familiar with your clients and their support networks, and observe their interactions and exchanges.

Although many of these appointments will go smoothly, it's an unfortunate reality that not all seniors or persons with diminished capacity are surrounded by people who have their best interests at heart. 

In light of the DOL regulations and the "best interest" standard all financial professionals must soon abide by, it may also be your responsibility to make sure that those who have access to a client’s finances are doing what is best for your client. You might also need to report if you discover any financial abuse.

If a senior or other vulnerable client is being financially exploited, you may notice behavioral or financial red flags, such as:

  • The client exhibits potential signs of diminished capacity, such as confusion or forgetfulness.
  • A sudden appearance of newly formed friendships or previously uninvolved relatives.
  • An appearance of insufficient care or neglect despite the client having adequate resources.
  • A significant change in the client's financial habits, such as increased or more frequent withdrawals.
  • Abrupt changes in wills, trusts, or Powers of Attorney.
  • A family member or caregiver controls the communications between you and your client.

If you witness any behaviors that you consider to be "red flags," raise your concerns in accordance with your firm's escalation process. In addition, thirty-three states, the District of Columbia, and Puerto Rico addressed financial exploitation of the elderly and vulnerable adults in the 2015 legislative session, and you may be operating in a state that makes you a "mandatory reporter" of financial abuse.

Check with your firm for its process on reporting such concerns. Reviewing and acting on potential "red flags" can help protect your vulnerable clients and their retirement savings from financial predators.


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Caroline Elrod is a Retirement Strategies Consultant with the Retirement Solutions Division at Pacific Life. She brings several years of industry experience to her role that includes tax planning with insurance products. Caroline enjoys educating financial advisors on creative and practical solutions to business, estate and retirement planning concerns.

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