As clients age, and as they pass on their wealth, you may need to watch for hints of incapacity.

But that’s not an easy task, says Dr. Kenneth Shulman of Sunnybrook Health Sciences Centre in Toronto. Shulman, who’s also a psychiatry professor at the University of Toronto, spoke at CFA’s 2015 Annual Wealth Conference about the role medical experts play in assessing mental capacity.

Read: Prepare for client incapacity

Discussing mental health concerns with patients can be difficult, he notes, because he’s found many people dismiss them. In fact, those afflicted with conditions such as dementia are often able to complete basic tasks and carry on simple conversations long after symptoms of incapacity start appearing.


Still, people over age 85 have a 25% to 30% chance of suffering from dementia, compared to 6% to 8% of people around age 65, says Shulman. For more on monitoring clients’ mental health, check out assistant editor Katie Keir’s live tweets below.

Live tweets from CFA’s 2015 Annual Wealth Conference

Make sure you know the rules and terms of capacity assessment, says Shulman. Testamentary capacity relates to someone’s ability to write a will ‪@CFAToronto

That differs from mental capacity, he adds, which is what medical professionals assess. Judges assess testamentary capacity ‪@CFAToronto

What are the red flags of capacity? First, consider people’s ages and family health histories. Dementia may be prevalent ‪@CFAToronto

When you know someone has a disorder, be extra vigilant. Make sure wills are in place, and appointments (PoAs) are made ‪@CFAToronto

Also, says Shulman, beware of too much banal conversation. Clients can engage in this activity long after abilities start failing ‪@CFAToronto (Read: Address clients’ fear of aging)

So, as clients age, ask detailed questions about their portfolios, and regularly assess their understanding of markets and their returns ‪@CFAToronto

The most common misconception people with dementia have is they think family members are stealing money, says Shulman ‪@CFAToronto (Read: Preventing PoA abuses)

Two tests that measure capacity are the MMSE (Mini Mental State Examination) and the MoCA (Montreal Cognitive Assessment). These look at whether people understand time and the world around them, for example ‪@CFAToronto

But, mental ‪#capacity test results can be influenced by education levels, says Shulman. People with lack of education can appear incapacitated when they’re not.

Most capacity tests can also be used to measure people’s skills as they deteriorate, says Shulman ‪@CFAToronto

Older clients with depression are more prone to dementia, says Shulman, especially if it’s hard to treat ‪@CFAToronto

However, bereavement isn’t a reason to say someone is incapable, says Shulman. Give people time and connect with family doctors if grieving is severe ‪@CFAToronto

In terms of assessing capacity, not all doctors can do this. Training in the industry is lacking, and lawyers must be involved, says Shulman ‪@CFAToronto (Read: Get help managing the funds of minors, disabled adults)

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