When your clients start losing their minds...
April 6, 2009 2:07 PM   Subscribe

Our clients are getting older. I need a form for them to fill out that tells me who to talk to if I get concerned about their competence to handle their own finances.

Our financial planning office has some clients who seem to be starting down the dementia road. For confidentiality reasons we aren't allowed to tell anyone in their circle our concerns until the client is so far gone that the state can get involved.

We need a form that tells us who we can call if we start getting worried. The forms I can find are all geared towards sudden death or complete disability. While this would be similar to an Emergency Contact form, it would be for more gradual "emergencies."

1) Does anyone here have a form like this already? (Can I copy some of the wording?)
2) Does anyone have suggestions on wording? Obviously this is a touchy subject. Most clients whose friends and family aren't actively involved in their finances would prefer to keep it that way.
3) Should I lay out guidelines as to when we might call that contact? (Forgetfulness? How forgetful is forgetful?)

Feel free to tell me anything else I've missed.

We will have an attorney and our compliance department look over any form we make up, so I'm less worried about the legality end.
posted by small_ruminant to Law & Government (11 answers total) 1 user marked this as a favorite
How about getting the attorney and compliance guys to design the form?
posted by koahiatamadl at 2:09 PM on April 6, 2009

Response by poster: They're good at legality- not sensitivity.
posted by small_ruminant at 2:20 PM on April 6, 2009

Well - as you are treading on very thin ground here you want to have the legal framework clear before you worry about wording it. In particular you should consult them on whether you should be looking to introduce such a form in the first place and if so what it must contain. Then you can worry about how to phrase it in a sensitive manner.
posted by koahiatamadl at 2:33 PM on April 6, 2009

Response by poster: Trust me when I tell you that if it's going to happen, we have to write it first. THEN legal can rip it up.
posted by small_ruminant at 2:59 PM on April 6, 2009

This is a very interesting question from both an ethical and legal perspective. I will let the attorneys speak to the legal issues. My only suggestion, if you decide to pursue this, is to make absolutely sure that you have thoroughly discussed and documented your concerns with the client before notifying any third party. I would expect you have a set of professional standards which assures the client that your fiduciary, legal and ethical responsibilities are to act in their best interest. Given that, I do not see how you contact any third party with out informing them, thoroughly discussing it and documenting your concerns. It would seem you could approach this by instituting a process that involves all clients ( a "who should we contact policy" if we have concerns). Each client would have the right to opt in or opt out and you are obligated to respect their wishes. I would think that in all cases the party to be contacted should be a disinterested third party who has no interest in the disposition or profit from the management of any assets. It would seem to me that using a family member is rife with possible conflicts of interest, possibility of litigation and unhappy relatives or clients. I will be interested to see where this goes. Good luck
posted by rmhsinc at 3:13 PM on April 6, 2009

Response by poster: It's a real problem, especially since as they start losing it they start getting paranoid and will refuse to trust the people they used to. (Third parties work really well for difusing this, btw, if you can get them there in time- even having a bookkeeper keeping an eye on things can sometimes help enormously.)

Sometimes family is a good option, but not always, and not only for the reasons you mention. Many of our clients cut themselves off from their family for good reason, (like they're gay and their families are intolerant.)

If clients get paranoid enough it can be disasterous. If they're still willing to trust banks, they'll move all their money to multiple savings accounts- and then forget where they are or even that they did it. If they aren't willing to trust banks, they'll keep it someplace(s) goofy- all in cash.

Or some shyster will talk them into investing in something terrible, they'll forget they did it and start accusing you of stealing from them. It's terrible to watch someone who used to be so bright and funny become like that.

Sorry. I'll stop over-moderating now.
posted by small_ruminant at 3:51 PM on April 6, 2009

There certainly is more to this than the legal aspect. As a person who is getting up there in years myself, I'm pleased about your firm's concern to protect your clients' assets. Perhaps your local agencies on aging might have some suggestions on the best way to broach the subject with your clients and get their cooperation. Once the paranoia sets in it's too late. But there might be diplomatic ways of letting clients know up front that if they ever start making decisions the firm believes is not in their best interest, you would like to have the option of consulting a third party.
posted by lazydog at 4:32 PM on April 6, 2009

Why not ask your elder clients to help you write out a protocol? Most will be pleased to contribute.

Many seniors think a lot about things like this; I'm sure that helping strategize for a common concern among their peer group would be very satisfying.
posted by reflecked at 5:18 PM on April 6, 2009

Do you need an official form? I'm in the UK, but when we need something like this, a letter signed by the client to be kept on the file will suffice for legal and compliance purposes. Also, does it specifically need to address the deterioration of mental faculties? Can you not just get something which would give another person third-party authority on the account?

Something like:

Please accept this letter as my authority for My Nominated Person to speak to my Financial Advisor/Financial Planning Firm about my accounts and to give instructions on my behalf in the event of an emergency or should I become unreachable.




Nominated Person

I would probably say that a client getting to the point where you have become alarmed about their mental state or their dementia is potenially causing them to make decisions which are not in their own best interest would constitute an emergency. Do you have a more concrete example of when you feel you might need to contact a third party?
posted by triggerfinger at 11:08 AM on April 7, 2009

Response by poster: triggerfinger, what you're describing is a Financial Power of Attorney, which is farther along than this letter would go. We do strongly encourage our clients to have this and to give us copies but many don't. Fortunately, by the time LPOAs come into play, we have pretty specific legal guidelines to go by, and trustees are named in the paperwork.

As an example of what I'm talking about: Whom can we call if you start showing up every day thinking you have an appointment? Or call every day with the same basic question? We want someone we're allowed to tell that we're worried, and that maybe you need to get checked out by an MD.
posted by small_ruminant at 4:27 PM on April 7, 2009

Thanks for clarifying small_ruminant.

We have lots of elderly clients as well, and there have been several situations where we have wondered somewhat about their mental state (rightly or wrongly). With regard to financial/investment decisions they're making, the best we can do is explain clearly, in a way they can understand, the risks or implications of the action they may be taking and make sure the situation is well documented by way of a detailed file note.

What you're talking about is much more tricky. I don't really recall any situations where we've had a client exhibit alarming behaviour not directly related to financial decisions (though it could affect such decisions) and is therefore outside the realm of risk warnings and other things we're all accustomed to. I don't have any real answer for you, but you've piqued my interest. I'll ask around at work and check with our compliance people to see if I can find anyone who has used a form/letter like what you're asking about. There may not be any such thing and I know the UK will be slightly different from the US anyway but maybe I can find something that may be helpful to you. I'm not back in work until next Wednesday, but I'll come back to you if I find anything helpful. Otherwise, if you find something that works, will you post it here? I'd be interested in knowing.
posted by triggerfinger at 1:50 AM on April 8, 2009

« Older Should I Watch The Post-Sorkin West Wing?   |   Is an energy audit worth it? Newer »
This thread is closed to new comments.