All financial advisors devote significant effort to detecting threats that might harm their clients. And when you find them, you’re quick to alert your clients to the risk. The greatest risk to your clients’ future financial security, though, is not one that advisors pay the most attention to.
Sure, we all study current events for cautionary signs of investment risk. And we pay close attention to our clients’ changing circumstances and tolerance for risk. Relatively few clients of any advisor’s book of business, however, will experience problems that could undermine — and even wipe out — their life’s savings.
But the one risk that many of your clients are likely to experience is also the risk that few advisors pay any attention to. That risk is Alzheimer’s disease.
How many of your clients do you expect to live to age 85 or beyond? Probably the vast majority, right? Then, consider this: one in three 85-year-olds have AD.
And it’s among the most expensive of all diseases — $150,000 to $250,000 per year is a common range. The average patient lives 12 years from onset of symptoms to death, and they often require 24/7 care. The reason is that they are ambulatory, making them a threat to themselves and others. They can turn on a stove, drive a car, pick up a firearm. Wandering is a common problem, as AD patients are notorious for simply walking out the front door. Equally common is sundowning, when symptoms intensify each day at dusk. Agitation, anger and violence are often the result when patients don’t recognize (and become afraid of) their spouse or children.
How many of your clients can afford to spend $150,000 per year for 10-plus years?
Fortunately, researchers have learned that healthy lifestyles can delay the onset of symptoms, reduce their severity and even reverse them. Proper nutrition, exercise, sleep, low stress and strong relationships — in other words, everything doctors tell us to do anyway — are not only good for our bodies, they are good for our brains, too.
The key, then, is to identify signs of early cognitive decline — giving the patient (your client) plenty of time to combat the disease by improving their lifestyle.
And here’s the most important point: Financial mistakes are often the first sign of cognitive decline — giving you the unique ability to warn affected clients before anyone else.
A 2023 study from the Federal Reserve Bank of New York and Georgetown University found that people begin missing credit card and mortgage payments up to five years before being diagnosed with dementia. One year before diagnosis, they’re 17% more likely to miss a mortgage payment and 34% more likely to fall behind on credit cards. New data in 2024 confirmed this pattern; CNN reported that credit score declines and delinquencies often occur well before any medical diagnosis.
Spotting Early Warning Signs
You know your clients’ financial behavior. And when that behavior changes — the client starts missing bills, skips required minimum distributions, or suddenly starts buying risky investments — these seemingly isolated slip-ups may actually be early warnings.
And those warnings require your action. Ask directly: “I noticed a few missed payments. Everything OK?” If the client’s response raises concern, engage with a family member or caregiver.
Building Protective Guardrails
You should have a trusted contact on file for every client, under FINRA Rule 4512. This lets you reach out if you suspect fraud or confusion, without violating privacy rules. You should also help your clients establish bill-pay automation and powers of attorney while they are still competent.
Creating Your Action Plan
Build a referral network — elder law and estate attorneys, geriatric care managers, and more, and download guides from the Alzheimer’s Association to help you train your team. Learn how cognitive decline affects money decisions.
Remember: you’re not diagnosing; you’re merely spotting risk and helping your clients stay protected.
As a financial advisor, you’re not just managing investments. You’re helping your clients protect their independence and financial security. When their judgment starts to fade, your attention can make all the difference.
Because no one knows your clients' financial lives like you do — and no one is better positioned to protect them.
Ric Edelman is an author and founder of the RIA Edelman Financial Engines. He now leads the Digital Assets Council of Financial Professionals.
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