It’s Been a Productive Month!

Submitted by Scott Nelson, CFA, CFP® - Professional Issues Committee Director

The past few weeks have been busy for the Professional Issues Committee and the issues that we are currently highlighting.  There have been some great learning opportunities on the issues of advisor regulation and serving the needs of senior clients. To recap these events:

On September 27th, the Professional Issues Committee and the NexGen Committee jointly sponsored the RIA Regulations for Breakfast seminar.  We had over 40 attendees to our discussion of RIA regulations that featured Department of Commerce Deputy Commissioner Brian Edstrom and Head Examiner Annette Minor.  It was a thorough discussion with good insight into what ones needs to do to become an RIA in Minnesota.  The most important take away for the state-regulated RIAs that attended was the list of deficiencies that the examiners are most interested. This list had been sent as a letter to all state-regulated RIAs recently so they had no reason to not know where to concentrate their efforts to be compliant.

MN FPA held its annual Symposium October 10th & 11th and it featured a couple of speakers who spoke of the need for advisors to improve their services for aging clients.   Deputy Commissioner Brian Edstrom discussed the very serious issue of elder abuse and financial exploitation to a packed room.  He described the signs of elder exploitation and what the Department of Commerce is doing to protect Minnesota’s aging population from exploitation.

Bob Mauterstock gave a good talk on the steps advisors need to start taking to protect themselves and their clients from the ravages of aging. As noted here before, Bob has written a couple books intended to help families start the conversation on how to deal with the challenges of an aging family member.  Bob stressed the need for advisors to take a proactive role in getting these conversations going.  He also stressed the need for advisors to get processes in place to handle the situations that are going arise as client’s age.

Finally, Keith Loveland and I were invited to a roundtable discussion hosted by Commerce Commissioner Rothman on October 14th to provide feedback on what the Commerce Department should propose for legislation in the upcoming state legislative session.  The Safe Seniors Financial Protection act will again be introduced and will hopefully gain approval from the legislature seeing as similar legislation is making its way through the federal legislative chambers.

Along the lines of keeping seniors safe, I have found some good information in the book Succeed With Senior Clients: A Financial Advisor’s Guide To Best Practices by Elder Law Attorney Carolyn Rosenblatt and Psychologist Dr. Mikol Davis.  The authors recommend that advisor’s develop a series of best practices and checklists to better serve their aging clients as well as protect themselves from potential liability.  The takeaway, I got from the book was the authors’ recommendation to segregate clients over age 65 and create a service model that focuses on their needs.   This service structure would involve more frequent meetings and communications with senior clients to stay on top of their physical and mental health.  Segregation would also serve as a reminder to office staff to be more attentive in conversations with senior clients for signs of decline in physical and mental health and to keep advisors abreast of these interactions.  The authors provide several checklists for warning signs of diminished capacity, signs of elder abuse, and steps to take to create a senior-centric service model.

The past few weeks have been very informative of the challenges that advisors face is doing what’s best for their senior clients and to stay regulatory compliant.  The job of an advisor is all about staying informed. Informed about our clients and informed of the rules under which we operate. It’s rarely an easy job, but it can be so rewarding when one sees the important role they play in their client’s lives.