Elders Special Handling Required

Elders Special Handling Required

If you specialize in serving the senior market, or plan to, today's message is for you.
t is a dream scenario for a financial pro to develop a relationship with clients in their 30s, 40s or 50s and keep those clients for many decades, taking pride in having helped them meet their retirement goals and seeing those goals come to fruition. Together, over decades, you will plan, make modest investments, explore new opportunities, make adjustments, celebrate wins, weather storms, make more adjustments and ultimately realize the retirement outcome. Season, through season, you and your client knew the plan and the reasons for the plan.

But one thing has certainly changed. Your client has become older. With age, things change. Life circumstances change. Liquidity needs, risk tolerance, ultimate goals, health, and possibly mental capacity changes. With that comes more involvement of their children and heirs. And, because seniors are a sought-after target market, many other advisors will vie for their attention and investable assets as well. Suddenly, others may be second-guessing your strategy and the investment outcome.

But one thing has certainly changed. Your client has become older. With age, things change. Life circumstances change. Liquidity needs, risk tolerance, ultimate goals, health, and possibly mental capacity changes. With that comes more involvement of their children and heirs. And, because seniors are a sought-after target market, many other advisors will vie for their attention and investable assets as well. Suddenly, others may be second-guessing your strategy and the investment outcome.

If you're targeting new clients who are seniors, you have the potential for increased risk here too. The SEC and lawyers have on their radar financial pros who market to seniors seeking to find those who commit Elder Abuse. The California definition of Elder Abuse is "the neglect, exploitation or "painful or harmful" mistreatment of anyone who is 65 or older (or any disabled dependent adult age 18 to 64). It can involve physical violence, psychological abuse, isolation, abandonment, abduction, false imprisonment or a caregiver's neglect. It could also involve unlawful taking of a senior's money or property."

Elders almost always make very sympathetic plaintiffs, making it easier to win an award against the financial professional. They often look like victims, worthy of compensation and their income-earning days are usually over. Without a judgement or E&O settlement, how will they make it? Many, if not most, E&O claims involving a senior allege Elder Abuse.

Here's the take-away. With existing and new elderly clients, use an abundance of caution and an abundance of documentation. Pay particular attention to their capacity to understand the products and risks. Clients of all ages must be able to understand and comprehend their risks and the solutions you provide, but in particular, the elderly. Their understanding could be tied to language barriers, mental capacity or even medications. A client's intelligence or past experience is irrelevant if they don't have the capacity NOW to understand your advice. Your documentation will be key. And, keep in mind your client's children at some point they may second-guess decisions your client makes (or made in the past), so it might make sense to include them now. Building that relationship sooner is better than later, particularly since Mom and Dad can attest to their understanding and agreement of the plan.

Seniors are wonderful clients and truly worth of special handling because they need your most careful attention.

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