As professionals, and fiduciaries, financial advisors are more than just purveyors of new stocks to buy. Clients expect a holistic, hyper-personalized wealth management experience, with the advisor becoming a dedicated partner, and coach, on everything in their financial lives and beyond.
The fiduciary duty to do what is in a client's best interest endures for the entirety of the relationship. Unfortunately, not all clients maintain their mental and physical health as they age. When clients may begin to lose their physical independence — or worse, their cognitive capacity to make financial and life decisions — it becomes imperative for advisors to step up their support and guidance.
In these challenging times, being there for clients takes on even greater significance, demonstrating a commitment to their welfare beyond mere financial transactions.
Here are four common scenarios that advisors might experience as they work with aging clients:
Approaching Pre-Planning
A recurring concern among many newer clients is the apprehension surrounding what is commonly referred to as the "first death." These individuals have diligently managed their finances and lives but find themselves uncertain about navigating the complexities of aging. They turn to their advisors, looking for not only financial guidance but also for a trusted source of wisdom and support. Much of this apprehension stems from a desire to spare their children the burden of making difficult decisions on their behalf.
It is crucial for advisors to create a safe and supportive environment in which clients feel comfortable discussing their concerns about aging, such as long-term care, estate planning or end-of-life wishes. While it is natural for new clients to initiate these discussions, it is equally important to engage current clients in these conversations. When proactively initiating these conversations, advisors should encourage open communication and provide resources to help.
Losing Mental Capacity
The criteria for determining incompetence are stringent. Typically, those who fall below this threshold should refrain from driving, writing checks or answering phones, for their own safety and others. Moreover, there is a risk of exploitation, with opportunistic individuals — sadly, often family members — potentially altering documents, beneficiaries or medical directives. Advisors' priority should always be to safeguard clients' interests.
