When Your Client Has Alzheimer’s
If Alzheimer’s disease isn’t on your radar yet, it should be. As the baby boomer generation ages, the number of people with Alzheimer’s will climb: an estimated 16 million are expected to suffer from the disease by 2050, up from 5.4 million today, according to the Alzheimer’s Association.
One early sign of the disease is trouble managing money, which puts financial advisors on the front lines. What’s more, according to Fidelity Investments, Alzheimer’s can double the amount of money a couple will need in retirement. Advisors can offer a critical service by helping clients plan for both dementia and devastating costs.
“Getting together your financial team is just as important as getting together your medical team,” said Angela Geiger, chief strategy officer for the Alzheimer’s Association.
The problem is big enough that the Investor Education Foundation of Financial Industry Regulatory Authority (FINRA) partnered with the Alzheimer’s Association to identify best practices that can be shared industry-wide. Members of the FINRA Foundation and the Alzheimer’s Association met with industry participants in March 2010.
Advisors’ best strategy is to be proactive by talking to clients early about the potential for dementia, but many are loathe to do so, according to John Gannon, senior vice president in FINRA’s Office of Investor Education.
“One thing we’re looking at is talking to firms and professionals about how to start that conversation,” Gannon said. “As you can imagine, telling somebody they may develop a form of dementia is not the most comfortable discussion to have.”
In a 2009 Fidelity Investments survey of more than 350 advisors, 96 percent said they feel unprepared to help clients who have Alzheimer’s. Half said that even when they suspect a problem exists, they are unsure how to raise the subject.
As a result, a major goal of the Roundtable will be identifying steps advisors can take in response to red flags such as memory loss and confusion; donations to shady charities; clients who conceal their condition to the point of making unsound decisions; and suspected financial abuse by relatives or caregivers.
Gannon also noted that advisors may have trouble distinguishing between Alzheimer’s and the more innocuous effects of aging – say, the client who seems confused, but is just a little hard of hearing.
Garth Scrivner, a senior investment counselor with StanCorp Investment Advisers in Albuquerque, N.M., said age-related dementia is a potentially “huge problem” for the industry. “Our average client’s age is probably between 60 and 80, so I definitely have seen some clients who are starting to exhibit the early signs of dementia and the beginning stages of what I guess might progress to Alzheimer’s,” he said.
Making a plan well beforehand is key, Scrivner said. “We try to talk to people early and say, ‘I know this isn’t happening now, but should it happen, let’s discuss what we’re going to do, just because you never know.’”
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