Financial Professionals Beware: A Look at False Claims by the Elderly

Most financial professionals work hard to protect and promote the interests of their clients. There is a growing population of aging adults in the country, many of whom rely – to their benefit – on the hard work and advice of financial professionals, such as bankers, attorneys and financial advisors.

Unfortunately, terrible stories of elder abuse exist and all too frequently, this abuse takes the form of financial abuse. Many observers, regulators and media members are rightfully sympathetic to elderly individuals. However, some elderly individuals and/or their families have chosen to exploit these sympathies by going back on commitments they have made or to play victim when an investment or piece of advice does not work out perfectly in their favor.

Elderly individuals can suffer from slow deteriorations in mental capacity or their cognitive function can be reduced quickly after a medical issue, such as a stroke. That being the case, some unscrupulous professionals will take advantage of these situations. However, the vast majority of professionals do not and they continue to service these clients in accordance with the highest standards.

Unfortunately, even a well-intentioned financial professional can find it very difficult to work with those who are losing their ability to manage their affairs. Such professionals might also find it difficult to work with family members of the elderly who are acting in ways that are not in the elder client’s best interests or are threatening to the financial professional.

The American Association of Retired Persons (AARP) has released a guide for financial professionals who are working with elderly clients. AARP suggests, among other things, that financial professionals should:

• Remain open and candid when meeting an elderly client for the first time. Have a forthright discussion about their financial goals.
• Spend some time talking about the client’s risk tolerance, including their emotional reaction to the acceptance or rejection of risks.
• Ensure that there is ongoing communication with the elderly client. Financial professionals should find the best way in which to communicate with their elderly clients that most clearly articulates what is going on.

Financial professionals should always protect themselves as well. Make notes of interviews and conversations you’ve had with your elderly clients. If forms are being executed by the elderly client, spend as much time as needed to ensure that the client understands what he or she is committing to and consider having witnesses present during document signings.

Financial professionals should review guidance offered by the organizations charged with the regulation of that professional’s industry. For example, the Securities and Exchange Commission has offered guidance to investment advisors and broker dealers in their handling of elderly clients.

The online resource, Investopedia, has also provided guidance for working with elderly clients. Investopedia emphasizes that financial professionals should understand and appreciate some of the unique issues that can arise when dealing with such clients. Consider the following:

• Investing time horizons and liquidity needs. Elderly clients will often have significantly shorter investment time horizons. These clients also experience liquidity needs – such as serious medical expenses – that other clients are less exposed to.
• Estate and legacy planning. Many Americans are beginning to take a closer look at what they will be leaving behind after they are gone. One of the fastest ways a financial professional can get in the middle of a family dispute is to be in control of or manage assets that were not properly planned for.
• Elder care and assisted living. Quite often, elderly clients are concerned with how much money will be needed to ensure that they are looked after in retirement. Life expectancies continue to go up and financial professionals should have a realistic understanding of the resources their clients will need to live comfortably in retirement.

If you are financial professional who is being sued by an elderly client or his or her family, contact a New Jersey white collar defense attorney at Helmer, Conley and Kasselman, P.A. immediately so we can discuss your legal rights and options.