Both government regulators and financial advisors are facing a growing dilemma: what to do for and about people with memory loss.
Sometimes, according to a recent American Association of Retired Persons online article, it is a person at a financial firm who first notices signs of dementia in clients, but that doesn’t mean there are rules and procedures in place for dealing with such a situation.
“Current regulations require advisers to protect a customer’s privacy and promptly execute orders, even if they’re imprudent. Advisers worry that by following the rules, they could later be sued by, say, the customer’s family, claiming the client didn’t have the capacity to make financial decisions.”
“The most important warning sign is a change in the person’s risk preferences and choices regarding how to invest money,” Daniel Marson, a neuropsychologist and director of the Alzheimer’s Disease Center at the University of Alabama in Birmingham, was quoted as saying. “They are interested in get-rich-quick schemes that they wouldn’t have paid attention to 10 or 15 years earlier.”
“The prospect that someone with a cognitive disorder might quickly deplete a nest egg or fall victim to a scam is why regulators, financial institutions and consumer advocates are trying to get ahead of the problem,” the story continues.
“The silver tsunami is upon us, and it will continue for the next 15 years, according to Lynne Egan, chairwoman of the senior issues and diminished capacity committee for the North American Securities Administrators Association. “We will see a large portion of our population turn 65.
“One-third of those people will have some diminished capacity, mostly related to general aging, but some will be as a result of dementia.”