Clients can get angry, defensive or depressed at the suggestion that they are having cognitive difficulties, even if advisors raise the issue with sensitivity and forethought. But this doesn't mean that advisors should ignore signs of problems.

If advisors wait until older clients show signs of diminished capacity, discussions with them may be difficult or impossible. "It's not an easy thing to say to someone: 'I think you're having trouble remembering,'" says Emily Drake, a senior advisor and partner at Fairport Asset Management who is also a longtime board member of the Benjamin Rose Institute on Aging in Cleveland.

It can also be difficult for an advisor to know what to say because of a lack of knowledge about the severity or duration of a condition. "Several factors, including stress, changes in medications, lack of sleep, and an inadequate diet, can affect a client's ability to understand," says Ryan Wilson of AARP's Public Policy Institute. "The client may seem confused or have memory lapses due to these temporary conditions."

Behavior or other health issues may also make it more difficult to gauge clients' cognitive abilities. San Francisco-based LPL-affiliated advisor Stephen Lovell cites an older client whose pain medication recently made her sound so unclear in the way she spoke that he was concerned that others might misjudge her. "They probably thought she was a little prickly or difficult, and she sounded confused, especially on the phone, but there was no problem with her intelligence or comprehension," he says.

"Sometimes clients themselves notice they’re slipping," says Ron Long, director of Wells Fargo Advisors' elder client initiatives. "They don't say they're suffering from dementia, but they may say, yeah, I have a concern."


The good news is that the most useful preparation for dealing with clients' diminished capacity is also generally the easiest, because it should take place well in advance of signs of any problem. Advisors should to get to know their clients when they're healthy and can discuss their wishes for the future in detail.

An advisor should know a client's decisions about power of attorney and keep up to date on any developments or changes. It helps to observe client behavior over time, taking note of any indications of long-term decline.

Advisors should especially get to know family members, because as a principal client declines, planners will need to know who to talk to in that client's place — and how to make that transition.

Proper preparation will give advisors tools for serving clients even if they develop problems making decisions or expressing them. Advance thought and discussion can help to lay the groundwork for a trusted relative or friend to assist as a proxy. If the client, with the aid of the advisor, weighs those other individuals carefully, the chances are greater that the proxy who is chosen will be someone who will safeguard the client's best interests.

Preparations are likely to make conversations about a client's cognitive decline less difficult, if it occurs. Family members are appreciative when advisors take on the difficulties with sensitivity, Long says.

"In instances of diminished capacity, we've gotten notes from the family members thanking us for bringing this to their attention," he says. "We've seen the money stay because there was an advisor who was trying to be more concerned about the client and family, as opposed to whether the money stays or goes."

Paul Hechinger is a New York-based freelance writer.

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

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