How Financial Planners Can Fight Elder Abuse

As our population continues to age, so we must continue to fight elder abuse. The most common kind of elder abuse is financial abuse, and the good news is that professionals like financial planners can help to identify and fight elder abuse.

Why are the elderly targeted? Their loneliness and isolation make them easy targets. They are vulnerable, in need of a helping hand or someone who will pay them some attention. They’re easy prey for undue influence, trusting of their perpetrators. Maybe dementia is setting in.

How Elder Financial Abuse Occurs
In 2016, Mary Evans was indicted for allegedly stealing more than $400,000 from three elderly men in New York City.

Ms. Evans, 44, approached her targets in neighborhood restaurants, supermarkets or coffee shops, engaging them in a conversation by pretending to recognize them from prior encounters, according to Manhattan District Attorney Cyrus Vance. According to the charges, Ms. Evans stole more than $130,000 in cash and goods, including a Mercedes convertible, from a 77-year-old retired transit employee. Her second victim was an 81-year-old, retired church musical director from whom she stole $53,000. She obtained a marriage certificate for herself and her third victim, a 73-year-old retired college professor who suffered from dementia, and withdrew $225,000 from his retirement account.
A study issued last year by True Link Financial, a financial services firm that helps older adults and their families protect themselves from fraud, put the figure at $36.5 billion. Even at that, most experts believe the problem is significantly underreported. Cases often don’t come to light because victims are embarrassed about having allowed themselves to be swindled, or reluctant to point the finger at the perpetrators — often people who are close to them.

How Financial Planners Can Help Fight Elder Abuse
Financial planners are on the front lines of elder financial abuse and are often among the first to spot red flags. Yet they’re not always sure how to respond and they worry about the consequences of taking action.

An InvestmentNews survey of 591 advisers found that 62% have seen or suspected financial abuse of an elderly client at least once. But more than half of those who suspected abuse — 56% — said they didn’t report it.

The trouble for advisers is while they often see hints of exploitation, the hints are often “very fuzzy,” and it’s not within their expertise to figure out if the person sitting in front of them is being victimized, according to Dr. Blum, who provides expert evaluation in cases of undue influence and manipulation tactics. Indeed, 61% of advisers in the InvestmentNews survey said they didn’t report suspected financial abuse of their elderly clients because they “did not have enough evidence.”

In the InvestmentNews survey, 65% of advisers identified a family member as a suspected perpetrator, while 30% pointed to a friend or acquaintance and 30% said it was a caregiver.

Bank of America Merrill Lynch surveyed its advisers last year to identify the most common perpetrators of elder financial abuse and found that 71% cited children of the victim, with 32% flagging other family members and 18% identifying anonymous fraudsters.

Organisations Who Have Introduced Measures To Fight Elder Abuse
In 2010, Wells Fargo started tracking instances of financial exploitation of senior and elderly clients. The number of reported cases rose from about 30 a month in 2010 to 90 to 100 cases in 2014. The increase was in part due to the firm’s focus on training financial planners to spot it. And more than two years ago, Wells Fargo formed a unit within in its compliance department to process reports of suspected fraud from financial planners themselves. The unit has fielded about 2,000 incidents of abuse and frequently brings in adult protective services agencies or financial regulators into the cases.

Merrill Lynch, meanwhile, educates its financial planners on preventing elder abuse and encourages them to acquaint themselves with their elderly clients’ family or close friends so they can turn to someone with any doubts. The company also gives its financial planners an authorization form to get a trusted contact person planners can consult about suspicious activity.

Morgan Stanley has built a website on senior client-specific concerns for its financial planners. It also trains its reps on identifying exploitation and has a protocol for taking up issues affecting senior clients to its legal unit. Meanwhile, smaller wealth management firms are taking similar steps, according to the publication.

Fight Elder Abuse By Watching Out For Scams
Older people are also targeting by scammers they don’t know, and here are the most common common scams and frauds.

• Getting a call or email from the ATO demanding immediate payment to avoid jail or requesting identifying information

• Receiving a phone call from a “computer technician” informing the client of a computer virus that is rapidly spreading and stealing person information. The caller is then able to access the computer and its data.

• Notification that the client has won a huge lottery in a foreign country, but in order to receive the millions they must pay fees, transport or other processing costs upfront.

• Receiving an email or phone call that a grandchild or other relative is stranded in a foreign country without money and passport, or is in a hospital, or was jailed unjustly, along with a plea to send money right away.

• An email from a bank or financial institution that looks legitimate but that comes from an address the client does not recognize, or that has no subject line, especially if it contains a link to click on.

• A “friend” develops a relationship online, offering understanding and love to a lonely client. Before long, the friend begins to request money to help resolve legal or medical issues, or to fund a trip to come meet in person, or any number of other scenarios. Once money is sent the first time, the requests continue endlessly.

Expert lawyers in succession law (wills and estates) are also trained to recognise elder financial abuse, including undue influence. The key is to seek advice as soon as you become aware of the problem so that you can minimise the loss to the older person. Bryan Mitchell is an Accredited Specialist in Succession Law (wills and estates) and takes a keen interest in safeguarding older people.

For your free, 10-minute phone consultation, please contact us today.