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How We Are Protecting Our Aging Clients

Richard C. Morrow, CPA, CFP®   /   Michael G. Wassmann, JD


One of the challenges of living longer is combating the financial risks resulting from diminished mental capacity and elder financial abuse. Protecting our clients from these risks is one of the many responsibilities we care deeply about at HBKS Wealth Advisors. An advantage of the long-term relationships we develop with our clients is that we, their financial advisors, are often close enough to identify those situations. To protect our elderly clients, we have adopted a set of policies and procedures to promote appropriate responses to protect the financial interests of our aging clients.

Watching for Warning signs
HBKS financial advisors and service team members interact closely with clients and are often in a position to notice potential signs of diminished capacity and elder financial abuse. We provide training, updates and other education to help advisors recognize those signs, as well as how to respond as provided for in our policies and procedures.

Of course, we are not medical professionals, nor do we possess any such related expertise. We also understand that not every forgotten name or pause to clarify a thought is a sign of diminished capacity. However, if a client in his or her advancing years demonstrates signs of declining cognitive ability or behavior suggesting financial abuse, we take caution to ensure our services remain consistent with their investment objective or help protect them from financial abuse. We are committed to understanding actual warning signs so that we can play our role in protecting our clients.

Regulatory Requirements
One of the challenges HBKS Wealth Advisors faces as a registered investment advisory is that we are subject to various, and sometimes contradictory, regulatory obligations in dealing with our clients’ accounts and information. Securities and Exchange Commission (SEC) Regulation S-P requires us to protect a client’s right to confidentiality and privacy, which limits conversations with others about an elderly client—even if we have serious concerns and a fiduciary obligation to act in the client’s best interests. Other state and federal regulations allow us to take certain actions in response to diminished capacity or elder financial abuse but come with certain requirements and limitations. Some states have gone so far as to require reporting of certain situations to state authorities in ways that directly conflict with Regulation S-P.

Our Recommendations
To prepare for the potential risk of diminished capacity or elder financial abuse, and to allow your financial advisor to assist you in those circumstances, we recommend that aging clients consider having a family member or other individual appointed as a trusted contact person. You might consider assigning someone power of attorney or naming a trustee. Either option will help your financial advisor effectively represent your financial interests in cases of diminished capacity or financial abuse. We recommend that you speak with your financial advisor and possibly an attorney with respect to these options.

Some Other Recommendations For Aging Clients
One of the best ways to protect an elderly person’s finances is to develop a financial plan in coordination with their loved ones, typically a member of the family, like a son or daughter. The plan would address the specifics of the individual’s finances, but some of the most common elements include:

An estate plan. Identifies the scope of the estate and the client’s goals for the estate. If an estate plan is already in place, discuss their financial decisions and what guided them. Also, make adjustments to the plan for any assets not accounted for that might be vulnerable.

A simplified financial portfolio. As clients age, their HBKS financial advisors will discuss the various ways to simplify their portfolios, including setting aside money for future long-term care.

A durable power of attorney (POA). We work with an elder law attorney to develop a durable POA for an assigned individual to act on a person’s behalf financially and legally when they are no longer able to do so.

A living trust and a designated trustee. Provides guidance on managing the estate. The trustee follows these instructions when an individual with dementia is no longer able to manage his or her own affairs.

A living will. Allows you to convey decisions regarding your medical care without relying on any one person to carry out your wishes.

Do not resuscitate order. Allows you to decline CPR if your heart or breathing fails.

For more information, contact your HBKS financial advisor. Other sources of information include the National Institute on Aging. “Legal and financial planning for people with Alzheimer’s” (), and the Federal Trade Commission. “Family emergency scams”.


The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.

Elderly Mother with caretaker Daughter

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