Experts in a position to know say the problem of financial exploitation of senior citizens is real, and getting worse.
That is the finding of a just-released survey of 762 financial planners, securities regulators, adult protective services workers, medical professionals, law enforcement officials and others who deal daily with aging Americans whose cognitive abilities are in decline.
It is critical for advisors to be aware of their aging clients’ cognitive difficulties. Failure to do so, especially if they are selling or advising on insurance, could leave them legally vulnerable.
The non-profit Investor Protection Trust (IPT) conducted the survey in the first 10 days of June, and released it Wednesday, one day before the White House hosts a full day symposium on elder abuse.
The survey notably exhibited fairly high percentages of respondents affirming its conclusions. For example, 99 percent of respondents consider elderly Americans either “very vulnerable” (75%) or “somewhat vulnerable” (24%) to financial swindles, and the overwhelming weight of opinion (84%) similarly agreed the problem of targeting the elderly is getting worse.
More than 10% of the experts surveyed were financial planners (77), but other front-line professionals, including 76 state securities regulators, 172 adult protective service workers and 24 medical professionals participated.
Nearly two-thirds (58%) of these professionals deal with investment fraud victims “quite often” or “somewhat often.”
Michael Finke, who heads the Personal Financial Planning program at Texas Tech University, along with John Howe and Sandra Huston, published a study showing both that Americans over age 60 experience cognitive decline and, crucially, that they fail to recognize this decline.
That is consistent with the high percentage of IPT survey respondents (96%) who say that potential problems with mental comprehension are “very often” or “quite often” the reason for the vulnerability of seniors to investment fraud.