WASHINGTON – When it comes to preventing elder financial abuse or helping identify aging clients with diminished mental capacity, financial advisers may do well to heed simple advice: if you see something, say something.

"If you are going home, but still thinking about that client, then you need to do something about it," says Dr. Nancy Needell, who is also an instructor in psychiatry at Weill Cornell Medicine, a research unit at Cornell University.

Experts speaking at FINRA's annual conference urged advisers to be proactive in helping clients suffering from diminished mental capacity, Alzheimer's, elder abuse and other problems. Image: Bloomberg

Needell and other experts speaking at FINRA's annual conference, urged advisers to be proactive in helping clients suffering from diminished mental capacity, Alzheimer's, elder abuse and other problems.

They also encouraged firms to give their advisers avenues by which they can report concerns.

"If something wasn't wrong then you wouldn't be thinking about it," Dr. Nancy Needell says.

"The good brokers know their customers," says Jeff Pasquerella, a senior vice president and regional director at FINRA. "They get a sense, a feeling that something isn't right. You have to make sure that brokers know that they can talk it through with someone. They need to have an escalation process. They shouldn't keep it to themselves."


While the issues faced by older clients are not new, they are growing in importance as millions of baby boomers enter retirement.

Between 2000 and 2010, the number of Americans 65 years and over grew 15.1%, according to data from the U.S. Census Bureau. By comparison, the total population grew at just 9.1%.

Regulators are increasingly concerned about the protections in place for senior investors. Last year, FINRA launched a helpline for older clients. The regulator says it has received about 4,600 calls so far, referred over 200 matters to other regulators and helped seniors receive over $1.5 million in reimbursements.

"There is an aging population, their money has to last longer and we're in a low interest rate environment. So that has created more people with more concerns," Susan Axelrod, executive vice president of regulatory operations at FINRA, told On Wall Street in an interview at the regulator's conference.

"I would say it's always been important, but in the current environment it's incredibly important," she says.

Firms are also looking at more ways to be responsive to the needs and problems older clients face.

Mary Tucker, manager of elder client initiatives at Wells Fargo Advisors, says advisers are well positioned to detect problems clients may be having, whether it's Alzheimer's or other issues.

"They know their clients. They see their clients on a regular basis and they have a baseline for diminished capacity," Tucker told attendees.

Tucker says that Wells Fargo will, in some instances, request that clients get a letter from their doctor stating that they have they have the mental capacity to manage their finances. She says the firm is not asking for medical records, but a clear letter from the client's doctor.

"We are asking the client to self-disclose to us. And we have a remarkable success rate," she says.

Of course, she says, advisers may not be eager to have that conversation with a client. "This is a very uncomfortable thing to ask, but it is the right thing to ask if you think the client is lacking capacity."

Needell adds advisers shouldn't hesitate from broaching the subject for fear of being wrong. The worst outcome is that there is no problem for the client and you've shown yourself to be conscientious and caring about the client's well-being in the process.

What it comes back to is listening to your gut when you feel something is awry, these experts say.

"If something wasn't wrong then you wouldn't be thinking about it," Needell says.

Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access