CLIENT RELATIONS
“ The worst situation is to have no plan at all ,” Wood says .
Powers Of Attorney
One vital part of such plans is documenting powers of attorney . There are different types .
A medical power of attorney lets a trusted confidant make health-related decisions for a client when the client is unable to . A financial power of attorney , which can name the same or a different person , works in similar ways but typically goes into greater detail about exactly which types of financial decisions can and cannot be made by the designated person . The power to pay bills , for instance , is standard . The power to donate to a charity might not be . The rules vary by state .
Powers of attorney can be “ durable ,” meaning they can go into effect immediately and in perpetuity , or “ springing ,” in which case they only become effective after something happens , for instance if a client becomes incapacitated .
In addition , some advisors want clients to appoint someone to accept their Social Security payments . Social Security doesn ’ t typically accept powers of attorney , but clients can designate in advance up to three people to handle their benefit payments if the need arises . Otherwise , the federal agency will appoint someone .
Trusted Contacts
In addition , clients should name a trusted contact , who might or might not be the person with powers of attorney . “ Advisors need to have a trusted contact for all older clients ,” says Tom Salvino , CEO of Performance Wealth in Hinsdale , Ill . “ That person knows and cares about the client .”
The Financial Industry Regulatory Authority , in fact , requires firms to make “ a reasonable effort ” to obtain contact information for a trusted person for every noninstitutional client . Rule 4512 describes the circumstances under which a client ’ s confidential information
“ Advisors need to have a trusted contact for all older clients . That person knows and cares about the client .”
— Tom Salvino can be shared with this contact .
Blaine Butcher of Wealthcare Advisory Partners in Scappoose , Ore ., recommends checking in with all trusted contacts and designees annually “ to remind them of the responsibilities of their role .”
Estate Planning
For some advisors , these preparations are simply part of estate planning . “ Ensuring the currency of our clients ’ estate documents is a priority ,” says Corey Briggs , wealth manager at Plaza Advisory Group in St . Louis , which is affiliated with Steward Partners .
He says estate planning should include wills , trusts , advance medical directives , beneficiary designations , powers of attorney , and possibly even the early designation of a preferred legal guardian . “ This proactive approach safeguards against potential challenges ,” he says .
Clients should have their documents in order regardless of their age , says Stephanie Forrester , assistant vice president and advisor at Wealthspire in Madison , Wis . Having them , and updating them periodically , “ establishes some safety nets ,” she says .
An Uncomfortable Topic
To be sure , discussing mental deterioration can be uncomfortable . “ Parents can be extremely sensitive to comments from their children about their possible cognitive decline ,” says Claire Mork , director of financial planning at Edelman Financial Engines in Westminster , Colo .
Denial and avoidance are common . But that ’ s precisely where an advisor can help . “ Advisors can act as a neutral nonfamily member that can serve as the intermediary ,” she says .
At other times , however , the subject might arise naturally — such as when advisors first detect trouble . “ Advisors are usually in regular contact with their clients and often notice subtle changes in behavior ,” says Taylor Custis , managing director and trust counsel at Fiduciary Trust International in Atlanta . Family members , she says , often miss the early
Continued on page 58
28 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2023 WWW . FA-MAG . COM