Submitted by Scott Nelson - Professional Issues Director
I would like to invite everyone to the FPA Professional Issues/NexGen K'Nex event on RIA formation and regulation on Tuesday, September 27th from 7:30 AM to 9 AM at 3300 Edinborough Way, Suite 350. RIA Regulations for Breakfast will cover the regulatory steps involved with becoming an RIA and what an RIA needs to do to satisfy state examiners.
On July 7th, Minnesota Department of Commerce Commissioner Rothman invited ‘stakeholders’ dealing with elder exploitation to meet and discuss possible solutions to this fast growing problem. Jason Kley, Keith Loveland and myself attended to represent FPA MN. Also in attendance were representatives from the Adult Protective Services division of the Department of Human Services, Hennepin County District Attorney’s Office, Minnesota Sherriff’s Association, Minnesota Bankers Association, Minnesota Credit Union Network, AARP, as well as non-profit social service organizations. Everyone knew of heart-breaking stories of elder fraud and exploitation but no one had a comprehensive solution for stopping it.
The closest that I can come to a comprehensive solution is that we as a society have to start being more accepting of the aging process. The American culture is so obsessed with searching for the fountain of youth that we avoid all the signs of physical and cognitive decline until a serious mishap leaves us scrambling to deal with our own or a family member’s diminished capacity.A national awareness campaign is needed to get everyone more accepting of their own limitations as they age and to seek out help particularly with financial matters. We need to get everyone over the age of 65 to find a couple people they can trust to help them keep track of their personal affairs.
I am not recommending that everyone with gray hair suddenly turnover all their affairs to someone else but rather that they become comfortable regularly discussing their financial matters with a couple different people. The goal is to develop a wider support system and deepen social bonds in order to avoid being at the mercy of one person. So much of elder abuse occurs because the victim is isolated, afraid or embarrassed to speak out and no one, other than the perpetrator, has knowledge of their financial situation.
We financial planners all need to develop our own proactive process for dealing with our clients’ aging by taking steps early on to:
- Raise client awareness of elder abuse
- Have clients identify a third-party emergency contact
- Get to know the client’s family or trusted friends and involve them in client meetings
- Help clients develop a system for safeguarding their assets and personal information
- Become more observant for changes in client behavior and appearance
- Create a communications process that involves more client contact on a regular basis
- Train staff to recognize the warning signs of abuse and cognitive decline
- Develop a review process that will signal suspicious activity in a client’s account
We all want to do right by our clients and serve them as long as we can. We also want to avoid the legal and regulatory hassle of a fraud occurrence plus have the opportunity to serve the client’s beneficiaries in the future. So consider the above steps as a way to create value of elder clients that will not only be appreciated by them but also by those who will be inheriting their assets. Like so many aspects of this business, looking out for our client’s best interest with these steps is also good way of looking out for our own as well.