Approximately one in eight cases logged with the National Center on Elder Abuse is financially related, with seniors being defrauded an average of $30,000. It is believed that only one in 44 actual instances of financial abuse are even reported.¹ As an advisor, you can play a critically important role in protecting your elderly clients from suffering the monetary loss and personal humiliation that comes with financial abuse.

Your role as an involved trusted advisor places you in a unique position to see the potential warning signs of financial abuse. When meeting with your senior clients, be mindful of these potential warning signs:

• Revisions to Wills, Account Beneficiaries and Powers of Attorney—Changes in estate beneficiaries or the responsible party empowered with direct financial control over an individual’s finances may be appropriate in most instances. However, it also may be because someone has influenced this change for his or her own financial benefit.
• Account Title Changes—Changing the account title on a bank or brokerage account to a joint ownership may be a red flag that someone—even a family member—is looking to gain access to your client’s assets for their own enrichment.
• Unusual Financial Activity—Whether it is unusual cash withdrawals or the liquidation of CDs or annuities, activity that is out of character or unnecessary may be a sign that someone is seeking to defraud your client.
• Home Refinancing—Refinancing a mortgage, or taking out a home equity loan when financial circumstances don’t indicate the need to, could serve as a red flag.

Elderly individuals are especially vulnerable to financial abuse since their critical thinking skills diminish with age and disease. They may be lonely, have suffered a recent loss or simply lack financial sophistication. A perpetrator may be anyone, including a con artist, neighbor, unethical professional, or family member with financial troubles or who feels justified in receiving “what’s theirs.”

A recent survey by Allianz Life found that 83 percent of seniors would turn to a trusted professional advisor to discuss protecting themselves against financial abuse.² Consider the ways you can play a proactive role in sheltering your clients from financial abuse. Perhaps, a good place to start is to include questions on your quarterly investment reviews to ask about changes in property ownership, wills, account beneficiaries and other potentially fraudulent activity.

Sources:

1. http://www.cnbc.com/2015/04/20/this-can-help-prevent-financial-abuse-of-the-elderly.html
2. https://www.allianzlife.com/about/news-and-events/news-releases/preventing-elder-financial-abuse

See referenced disclosure (2) at https://blog-dev.americanportfolios.com/disclosures/