whealthcare report 13

Can you be a fiduciary if you are not talking about health care costs and dementia?

Posted by Chris Heye, PhD on May 16, 2019 10:51:38 AM
Chris Heye, PhD
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The average age of a financial advisor client is roughly 63 years old. If you are like most advisors, the majority of your clients are over the age of 50.

Which means that most of your clients, including their partners if still alive, suffer from at least one chronic illness, like diabetes or high blood pressure or cancer. And because the frequency of dementia doubles every 5 years starting at age 60, it is very likely that your oldest clients suffer from some form of diminished cognitive capacity. 

So it is not surprising that a recent survey by Franklin Templeton Investments revealed that the top concerns of investors over the age of 65 are health-related. Thirty-six percent of respondents named health issues as their number one concern, while 41% declared paying for health care as their top financial concern. By contrast, only 16% over age 65 mentioned running out of money as the top concern. These results are very similar to other surveys assessing the retirement worries of older adults. 

Financial advisors are also on the front lines when it comes to protecting older adults who may be suffering from dementia. Difficulty managing financial affairs can be an early sign of cognitive decline, and by all measures the frequency of elder financial abuse is on the rise. So advisors need to be especially vigilant when it comes to preventing older clients from making bad financial decisions. 

Eldercare expert Jodi Lyons goes even further and argues that advisors should be among the first visits for anyone showing signs of diminished capacity. The reason for this is that older adults suffering from cognitive decline need to have financial and legal plans, documents, and costs estimates in place to manage the situation going forward and minimize the potential for poor decision-making or abuse. Ideally, these affairs should be in order before you go to the doctor.

So, if health care-related costs and events are the top retirement concerns of older adults, and if advisors are in the best position to minimize the negative financial impacts of cognitive decline, doesn't that mean that as a fiduciary you should be addressing these issues early and often?

It is difficult to argue that the answer is anything but a resounding "yes".

We understand that it can be difficult to discuss health-related issues with clients. And this is why we developed educational materials that help advisors successfully execute these important conversations. In fact, our educational materials just won an InvestmentNews Innovation award.

Being a fiduciary means acting in your clients' best interest. It is increasingly clear that the greatest "interest" of older adults is protection from the negative consequences of health-related events. By addressing these concerns, you will not only be in compliance with the law, but also providing the services your clients want most.

A health and longevity planning blog


Chris Heye, PhD

Whealthcare Planning Founder

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