Why older clients complain

Most financial complaints in Canada are made by those 60 years of age and older. So in honour of Seniors’ Month, the Ombudsman for Banking Services and Investments has released a list of common financial issues affecting seniors.

A frequent theme of these complaints is that the faith the senior placed in somebody was either unwarranted or violated.

“Seniors are generally more trusting of others, and unfortunately this sometimes leads to financial problems down the road,” says Ombudsman Doug Melville. “While trust in others is admirable, it is important to heed that old expression: Trust, but verify.”

Top issues include:

Delegating control of financial affairs: When a senior’s spouse or partner is solely responsible for managing the household finances, problems often arise. If that person passes away or the relationship ends, previously hidden issues come to light. OBSI recommends people make themselves fully aware and involved in managing their own finances at any stage of life, even if they are jointly handled with a spouse or partner.

Missing financial records: A number of complaints arise when a senior (or relative) vaguely recalls assets such as GICs or bonds held many years ago—but neither the senior nor their financial institution can account for what happened to them. To avoid this, keep records up-to-date, store them in a safe place, and make sure others know where the information is.

Grandparent scam: This common scam begins with a senior receiving a phone call from someone claiming to be a grandchild or other relative in urgent need of money. Sometimes an accomplice gets on the phone pretending to be a lawyer or health professional, putting additional pressure on the senior. The criminal asks the senior not to contact other relatives about the situation.

Powers of Attorney: Make sure any Power of Attorney document clearly spells out the intentions of the person granting it and identifies the specific powers being granted. The holder of a PoA must act only for the benefit of the person who gave the PoA, but when the PoA holder decides to act in his or her own interest, problems arise.

Unsuitable investments: Many people complain the investments recommended by their advisor were inconsistent with their personal and financial circumstances, investment time horizon, investment objectives and/or risk tolerance. Advisors must make an effort to know a senior’s circumstances and ensure the investor understand any documents he or she signs.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.