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Preparing Clients For The Risk Of Cognitive Decline
Advisors often have to bring up this sensitive topic with clients . By Ben Mattlin
ADVISORS KNOW THE MANY CHALLENGES THAT come up when their clients live longer . Yet it might seem outside of their lane to deal with one of the most painful problems , namely the possibility that an aging client will suffer diminished intellectual capability .
It ’ s surely a difficult subject , but not one that ’ s outside an advisor ’ s purview . If you want to help clients prepare for the future , experts say you can ’ t ignore the unpleasant possibility of their age-related cognitive decline .
Be Prepared
“ Financial advisors must be prepared for the challenges presented by an aging client base ,” says Bill McCollum , senior vice president and wealth advisor at Eagle Financial , a Wealthcare company in Shreveport , La . “ The solution is likely non-financial .”
Experts say you can get ahead of cognitive decline problems by bringing them up early . Matt Pastor , an advisor at Johnson
Brunetti in Wethersfield , Conn ., says his firm has procedures in place so it can discuss health and cognitive declines with new clients . “[ We ] continue to discuss it throughout the relationship ,” he adds . “ Part of retirement planning is planning for the ‘ what if ’ scenarios .”
A client ’ s diminished capacity should not be handled ad hoc , says Steve Parrish , a St . Augustine , Fla . -based co-director of the American College of Financial Services ’ Center for Retirement Income . “ There are a number of tools available that can be executed in advance , while the client still has capacity . If that client experiences diminished capacity later , these tools can help manage the situation .”
The best time to talk about the subject is before it becomes a concern , says Erin Wood , vice president of financial planning and advanced solutions at the Carson Group in Omaha , Neb . She suggests developing a “ cognitive decline plan ” that includes action steps when the time comes to deal with the client ’ s diminished intellectual capacity .
NOVEMBER 2023 | FINANCIAL ADVISOR MAGAZINE | 27