Debate: What is the role of financial advisors and platforms in detecting and addressing cognitive decline among older clients?

by

Baby Boomers’ Biggest Finan­cial Risk: Cog­ni­tive Decline (The Wall Street Journal):

For baby boomers who man­age their own nest eggs, a risk is loom­ing that has noth­ing to do with stock prices or inter­est rates.

The risk is cog­ni­tive decline, which can rob them of their judg­ment, often with­out much warn­ing. One big mistake—or a series of small­er ones—can go unno­ticed by loved ones, and poten­tial­ly rav­age a life­time of hard-earned savings.

To mit­i­gate these risks, there are things baby boomers and oth­ers can do now to pre­pare for any prob­lems. In addi­tion, big do-it-your­self invest­ing and trad­ing venues like Van­guard Group, Fideli­ty Invest­ments and Charles Schwab Corp. are strength­en­ing some of the ways they detect pos­si­ble signs of decline. Among oth­er things, all three firms check for clients’ dif­fi­cul­ty nav­i­gat­ing secu­ri­ty pro­to­cols or need for fre­quent pass­word resets. In such cas­es, a des­ig­nat­ed fam­i­ly mem­ber might be informed.

Van­guard also checks client-call record­ings for keywords—such as “con­fused” and “dementia”—that might sig­nal trou­ble. Keep read­ing impor­tant arti­cle HERE, over at The Wall Street Journal

Recent research brief:

Cog­ni­tive Aging and the Capac­i­ty to Man­age Mon­ey (Cen­ter for Retire­ment Research at Boston College)

The brief’s key find­ings are:

  • Most peo­ple in their 70s and 80s can still man­age their mon­ey, as finan­cial capac­i­ty relies on accu­mu­lat­ed knowl­edge, which large­ly stays intact with age.
  • How­ev­er, finan­cial novices who lack such knowl­edge and are forced to take over mon­ey man­age­ment after a spouse dies will like­ly need help.
  • And indi­vid­u­als who devel­op a cog­ni­tive impair­ment may see a sub­stan­tial reduc­tion in their finan­cial capac­i­ty and need some­one to step in for them.
  • Giv­en that this impaired group will grow to more than a third of indi­vid­u­als who reach their 80s, bet­ter mon­i­tor­ing of finan­cial capac­i­ty will be essential.

News in Context: