Preventing Financial Elder Abuse – Part II

July 31, 2017  |  

Preventing Financial Elder Abuse – Part II

Advisors and family members can team up on a loved one’s behalf

In Part I, we looked at the sources and warning signs of elder financial abuse.  In this installment, we will talk about how to work with the elderly once they have become victims and how to prevent elder financial abuse.

Don’t shame elders who have been scammed

No one of any age likes to admit they’ve been duped. On top of feeling embarrassed, many elders worry that their kids or spouses will overreact and force them to give up their financial independence–the control they feel when they pay their own bills.

It’s very important for family members and advisors not to reprimand or shame elders in their lives. They need comfort and support. When it comes to elders and their money, maybe ask gently if they need some help paying bills. The key is not to make them feel gullible.

The Alzheimer’s Association reports that about one-third of people over age 85 have Alzheimer’s Disease. Per the United States Department of Justice, the following are common signs of diminished financial capacity:

  • Forgetfulness: failure to perform financial responsibilities.
  • Declines in Management Skills: less ability to use a checkbook and other financial tools to carry out everyday transactions.
  • Arithmetic Mistakes: deterioration of everyday math skills, including the inability to make change or calculate a restaurant tip.
  • Confusion: inability to elementary financial terms one used to know.

The key for advisors and family members is to be there for the elders in your life. Let them know you are on their side and that it will be their decision—not yours–when it’s time to hand over control of their finances. Again, the decision must be on the elder’s timetable or you may get pushback.

What you and your family can do to defuse elder abuse of a loved one

•     If you’re a senior and have made someone else privy to your financial matters, you can hire a neutral third party, such as a member of the American Association of Daily Money Managers, to monitor bank accounts and credit requests.

•     You can count on a trusted, independent, fee-based financial advisor (who has nothing to gain from you beyond his or her normal fee) to alert you if something seems amiss in your account.

•     Other than outside help, family members can hold quick monthly meetings to go over the elderly person’s finances and can send one another quarterly reports as a checks-and-balances measure.

•     A financial power of attorney can be useful, allowing you to name a person or people in whom you have complete trust to pay bills and handle other matters when you’re unable to do so.

•     If you suspect that elder financial abuse is occurring, contact the Administration on Aging, the federal agency responsible for upholding the rights and safety of the elderly and their caregivers. The agency, which serves every county in the nation, can get a social worker on the scene quickly. Its Web site is

Advisors as the first line of detection

As wealth advisors, we are often the first ones to notice that clients aren’t remembering things. We work with clients regularly and many of our discussions require higher level thinking. We’re among the first to see early signs of cognitive impairment. That’s why we also have close relationships with the children of many of our older clients.

Key Takeaways

  • Treat the elderly with dignity and compassion. Shaming them for being scammed makes them less likely to seek help and perpetuates the problem.
  • Look for the signs of diminished capacity
  • Wealth Advisors can be on the front lines of detection
Source:  Investment News April 3-7
Special thanks to Hank Berkowitz who edited this blog and provided research.


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About Mark Rioboli

Mark A. Rioboli, CFP®, CFS is Director of Wealth Management for Independence Advisors, bringing over 25 years of experience in the wealth management industry. Have a question for Mark? CLICK HERE TO ASK MARK

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