Last updated: December 11 2018

Give Seniors the Gift of Financial Protection

It’s an advisor’s duty to help protect their clients from financial abuse, and seniors are most vulnerable to this. In fact, according to the Ontario Human Rights Commission, 62.5 percent of elder abuse cases are financial. What can you do to give your senior clients the gift of financial protection this holiday season?

At the Distinguished Advisor Conference in November, Alexis Verganelakis from Franklin Templeton touched upon how it’s an advisor’s duty to protect and provide comfort-focused counsel to elderly clients and their family members. What forms of financial abuse should you be on the lookout for?

In Canada, one of the most common forms of financial abuse are scams – with many people being victimized by criminals claiming to represent the CRA in order to collect unpaid taxes. According to reports, the Better Business Bureau has estimated that these scams cost taxpayers $3 million in 2015, $4.3 million in 2016, and over $5 million by 2017. This number is expected to grow in 2018. Although seniors aren’t the only victims of these scams, many elderly people hesitate to report that they’ve been a victim of a crime. In fact, according to the Canadian Anti-Fraud Centre, fewer than 5 percent file a report.

In this excerpt from his law blog, Philippe Richer outlines additional forms of elder financial abuse advisors should be aware of:

  1. Giving money to untrustworthy sources. I remember a situation where an elderly individual, who was still competent but easily influenced, regularly gave money for a period of several months to someone he had just met. That person asking for money told the elderly individual that he had come on hard times and needed funds. He relied on the elderly person’s generosity. We never found out how much money he handed over, but I suspect it was in the thousands.
  2. Financial abuse by a professional or power of attorney. The abuse also manifests itself when someone close to the elderly person – either a child, family member, or close acquaintance – exerts influence on the individual to change his or her will and power of attorney. People can exercise influence (in law this is called undue influence) by manipulating vulnerable individuals into changing their wills. In these cases, the manipulator becomes the sole or main beneficiary. This complicates matters even more because the deceased is no longer available to provide evidence as to his or her intentions. Courts must attempt to determine what the deceased wanted from other evidence.

As an advisor, you have an important responsibility: to oversee the finances of a senior as a part of helping them protect and grow their wealth. As a professional, you can also play a key role in bringing family members into the conversation if you notice your client’s metal capacities are diminishing, leaving them more vulnerable to financial abuse.

How can you prepare to fulfill this important role? First, by ensuring that your senior clients remain tax-compliant during filing, and acting on their behalf with the CRA. The January CE Summits provide an advanced personal income tax update with workshops in six Canadian cities, January 17-25.

Secondly, become a certified Real Wealth Manager so you can offer your clients of all ages a new value proposition that builds strong, inter-generational, multi-advisory relationships throughout personal and financial lifecycles. This coordinated approach to wealth management addresses what is lacking between all of the financial intermediators, including financial, legal, and tax advisors.

Bridging this gap provides greater financial protection to aging clients through the development of a common strategy for inter-family, inter-advisory collaboration that will stand the test of time despite rapid technological, regulatory and tax change.

* Ontario Human Rights Commission Report referred to in paragraph one.

Additional educational resources: Register for any of Knowledge Bureau’s designation programs before December 15 and save $50 on tuition. Or, if you’d like to preview the curriculum prior to enrolling, take a free trial and earn 2 CE/CPD credits upon completion!


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