When it comes to dealing with diminished cognitive abilities and suspected elder financial abuse, advisors need to be trained observers.

"The most important thing is for people to be trained to spot problems," says Betty Malks of the National Adult Protective Services Association. "And they need to be trained to know where to go for help."

There are no requirements for firms to offer senior-specific training, but many provide it, according to a joint SEC-FINRA report released this year. In examinations of 44 broker-dealers, the two regulators found that more than 77% incorporated instruction specifically about senior investors and senior issues in their employee training plans.

The training is focused on product suitability for older investors and on the proper communication of risk to those investors.

Roughly two-thirds of the firms in the survey conducted training about elder financial abuse prevention, which included education about red flags of abuse and protocols for alerting compliance and supervisor staff about potential problems.


Wells Fargo Advisors requires all of its employees to take a training course about diminished capacity and elder abuse. "It's for both customer-facing and non-customer-facing employees," says Ron Long, director of Wells Fargo Advisors' elder client initiatives.

The training is in the form of a 45-minute online course. After completing it, employees are required take an annual test with 10 questions. "I usually flunk one or two of them myself," Long told a White House conference on aging earlier this year.

The training course teaches the basic steps for spotting and dealing with elder abuse by using the mnemonic, "OWN IT" to outline the five steps of observation, wondering, negotiating, isolating and tattling. ("Yes, we have to come up with a better 't,'" Long admits.)

"Observing" and "wondering" include guidance on how advisors can look for changes in client behavior, ask the right questions and bring in trusted relatives to figure out what's going on.

If advisors think a client may be under the influence of an abuser, they are counseled to "negotiate" in order to mitigate immediate damage. Anything that interferes with a predator's intentions buys valuable time to bring in additional help for the client, Long says.

"Isolating" a client from a suspected abuser is also a key concept. "When the lawnmower guy is sitting there with an 82-year-old as she's asking for a $20,000 withdrawal, isolating her is a good first step to try figuring out what you have in front of you," Long says.

The final step, the "tattling," is alerting designated supervisors and compliance personnel to the situation. In Wells Fargo's case, that's the elder client initiative team.

Long adds that his unit offers additional elder services training throughout the year and is often asked to provide refresher seminars with model scenarios — "which are really ripped from our own files" — that prompt audience discussions. "A lot of it becomes financial advisors talking to each other about experiences and challenges they’ve faced," Long says.


Smaller firms may have to address training issues differently, Long says. They may be best served by designating a point person on staff who keeps up on best practices, attends conferences and becomes the go-to person for others in the firm with questions.

Planners may be heartened to know that financial abuse training is becoming more common for anyone dealing with the elderly and that experts in elder abuse prevention don't expect advisors to go it alone.

Lori Delagrammatikas, program manager for elder abuse training at San Diego State University's School of Social Work, develops instruction plans for adult protective service workers and says that it's increasingly important for social workers to get basic training in financial issues and products, like annuities and reverse mortgages, which can inappropriate for seniors.

"Cross-training" is a key concept, says Malks, who chairs NAPSA's Elder Financial Exploitation Advisory Board. Financial advisors need to be trained along with social workers, lawyers, district attorneys and families, she says, so they can work together.

This interdisciplinary approach to training is the idea behind a conference to be held at the SEC building in Washington on World Elder Abuse Awareness Day, which is June 15.

"The point is making sure that this subject is known by every professional who handles anything having to do with a client's portfolio, anything that has to do with their finances," Malks says. "The silos are beginning to break open."

Paul Hechinger is a New York-based freelance writer.

This story is part of a 30-day series on better serving seniors.

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