Aging clients pose challenges

By Leigh Doyle | August 4, 2011 | Last updated on August 4, 2011
12 min read

Michael Berton, a Senior Financial Planner with Assante Financial Management in Vancouver, knew his client’s mental faculties were slipping when he started getting weekly phone calls.

“One of my clients would call every week to ask if she had any money left. She had over $800,000 in her accounts so there was no reason for her to be concerned,” he recalls. But the experience was enough for him to call her daughter, who had power of attorney.

Read: Dealing with mental incapacity

“I checked if her mother had enough money in her accounts or if she needed to pay additional expenses. The daughter assured me she was fine and that she’s just forgetful these days,” he says.

Aging clients with the potential for cognitive decline are an increasing reality for advisors. Berton, who specializes in financial services for the 55-plus crowd, was well prepared for his client’s change in mental ability. Being ready means encouraging your clients to talk about their potential health concerns, getting paperwork such as wills and the power of attorney in place, and having a plan to adjust their investment mix to reduce risk.

And preparation isn’t just about the clients. Advisors need to understand how demographic trends will impact their business and what cognitive decline looks like.

The demographic reality

The aging population in Canada cannot be avoided. Ninety years ago, only 5% of Canadians were 65 years or older. In 2009, the percentage increased to 14%, and will continue to grow over the next 30 years as baby boomers turn 65. Only 25 years from now, roughly a quarter of the population of Canada—about 10 million—will be seniors, according to Statistics Canada.

In addition to demographic trends, advances in medicine and healthcare are allowing people to live longer lives. In fact, one of the fastest-growing demographic groups in Canada is people over the age of 100. While living longer is a welcome thing for many, one downside is a rise in susceptibility to chronic disease. Diabetes and arthritis will be common physical problems, but more important for advisors are health problems that affect mental ability.

According to the Alzheimer Society of Canada, unless a cause or cure is found by 2038, 1.1 million Canadians will suffer from dementia. Advisors who serve seniors will need to be aware of the possibility that some of their clients will experience dementia, or at the very least, some kind of mild cognitive decline.

Age-related cognitive decline is not an all-or-nothing event. A client will not come in one day having lost all faculties. It happens slowly and can be easy to dismiss or ignore. Like other health issues, it is worth knowing the indicators that something is wrong. According to the Alzheimer’s Association (U.S.), warning signs include:

  • Forgetting recently learned information such as appointment dates
  • Asking for the same details repeatedly and not remembering them later
  • Challenges in planning or solving problems, such as keeping track of monthly bills
  • Poor judgment, especially when dealing with money
  • Withdrawing from social activities or paying less attention to a favourite sports team
  • Changes in mood with an increase in confusion, suspicion, depression, fear and anxiety

How do you open a discussion on mental capacity? Click through below to find out.

When and how to talk

Discussing what should be done if your client can no longer make her own decisions can be an awkward conversation. It’s best not to broach the subject with information about increasing dementia rates or an overview of mental health issues in the client’s family.

“Remember, declining cognitive abilities are not the only reason a client may need to have someone else take over their decision-making responsibilities,” says Sara Kinnear, senior tax and estate planning specialist at Investors Group in Winnipeg, Manitoba.

“What if a client is hit by a bus and in a coma for three months? What if there are other physical disabilities that make it impossible for the client to leave his home? The outcome would be similar to losing mental capacity. It’s easier to start this conversation with a bus accident scenario than it is to bring up Alzheimer’s disease,” says Kinnear.

This style of opener allows an advisor to ask key questions about what the client would like to have happen in the event one of these situations occurs. It also makes it an easier transition to asking about other what-if scenarios such as cognitive decline.

Paul Bourbonniere, CFP is an investment advisor with Polson Bourbonniere Financial Planning Group in Markham, Ontario. He suggests starting this conversation when clients are 55 and beginning to plan for retirement. “They’re at maximum earning power, the mortgage is likely paid, and kids are probably out of the house. They’re ready to plan for the next 30 years,” he says. “There are going to be significant changes in that time and an advisor can outline what those changes might be.”

An advisor can draw on the experiences of older clients in their practice to help a younger couple plan for the future. “You can talk about what the financial response to certain events might look like and how your services will help and support the client,” he says. Often, clients are way ahead of an advisor on thinking about these issues because they are already seeing it within their own family, which can make it easier to talk about.

If a spouse is not involved in financial matters, begin including him or her at this stage. “If one of the couple is the money person, you need to get the other on board before issues happen, so a transition is easier in case the money person experiences problems first,” says Bourbonniere.

Once you’ve brought up potential future problems, what do you talk about? “The conversation is about planning,” says Kinnear. “Ask the client, ‘What does your future look like? If someone gets sick, would you prefer to live in a house? A one-floor condo? An assisted-living facility?’ What are the costs associated with those choices?” Depending on the client’s financial position and family history, it might be prudent to think about long-term-care insurance or critical-illness insurance to offset some of the costs associated with certain options. For example, even government-supported assisted-living facilities can cost thousands a month.

While you’re discussing products and planning, take some time to explore what their future investments should look like once they retire. “Older clients should have more conservative investments,” says Jillian Bryan, portfolio manager,TD Waterhouse Private Client Services in Vancouver. “They won’t have the income stream to replace losses, so the advisor is trying to preserve wealth.”

Berton agrees. An investment mix for retired clients will include GICs, low-risk funds, annuities and other tax-efficient options. “The correction of 2008 scared many people who are near—and in—retirement,” he says. “We have to protect them from running out of money. It can be difficult to find the ideal mix of investments to keep up with inflation, avoid tax and have a portfolio the client is comfortable with, but overall, it has to be low on risk.” He says the fund industry is keeping pace with the demand for products that fit these criteria.

Wills and power of attorney

Discussing assets transitions well into a chat about updating wills. “If a client doesn’t express [his] desires, preferably in writing, the family won’t know. This includes health decisions such as organ donation and life support. [Having a will] can make it easier on a family—and the advisor—because it can ease some of the emotional burden of decision-making,” says Kinnear.

Berton keeps copies of his clients’ wills and knows who the executors and power-of-attorney holders are. He suggests holding an in-home meeting with clients and their family to discuss estate planning. “It’s an opportunity to make a connection with the client’s family and get them thinking about some of the potential issues,” he says. An advisor can also connect with the other professionals in a client’s network, like the lawyer or accountant, if he hasn’t already.

An estate-planning session or updating of a will can send a client to their lawyer. “If you’re going to your lawyer now, why not also get the power of attorney done?” says Berton. A power of attorney is crucial for a client to put in place before any mental or physical health issues occur. It is a voluntary legal document that gives someone else the right to act on your client’s behalf. Having this in place will reduce problems between the advisor and the family when a health event happens. The advisor will know whom to call when decisions need to be made and can legally share important information about the client’s financial affairs. A client can also draw up a Power of Attorney for Personal Care (known as a Representation Agreement in B.C.) to make health and medical decisions in addition to legal and financial issues.

“The younger the client, the less likely it is that they will have a power of attorney in place, but they are just as likely to have a bus accident happen,” says Kinnear. “Not everyone who is elderly has diminished capacity, but the risks for it increase with age and we’re going to see more of it in the future.”

Many times clients just haven’t thought about or made the time to do it. In some cases, they don’t know who to appoint because they don’t have close family members or children, she says. “If there is no one who wants the responsibility, the Public Trustee or its equivalent government department in your province or territory may be willing. An advisor can contact the Public Trustee in advance as a way to help. The more steps you can take on behalf of your client, the better,” she says.

Another challenge with powers of attorney comes when large or blended families are involved. Kinnear says while it’s prudent for the client to be fair in the will, he or she needs to be practical when it comes to power of attorney. “You can get strange family dynamics causing friction, even in the decision of who to appoint,” she says. If this is happening, suggest your client appoint one person with power of attorney and give another the authority to act as a supervisor.

Once power of attorney is in place, an advisor might want to consider a meeting. “It is a good idea for the advisor to meet the [person] appointed under the power of attorney before the attorney takes over decision-making responsibilities. It just makes the transition much smoother,” says Kinnear. For example, Berton already has a relationship with the attorney for one of his clients because she is both the client’s daughter and his client.

If a client experiences serious cognitive decline before a power of attorney is put in place, the advisor is limited by privacy and confidentiality issues. If the family notices first, they can apply for a court order appointing a member as a guardian and/or attorney and then notify the advisor, says Kinnear. “In the rare cases where an advisor thinks they notice capacity slipping, they should contact their legal department for help before reaching out to any family members,” she says.

As clients age

Regardless of potential health issues of your clients, you will have to deal with aging. Chances are the majority won’t experience cognitive decline, but they will go through other changes—and advisors should be prepared.

Berton has picked up a lot of tips for aging clients. The first thing to learn is to avoid ageism, he says. Avoid being patronizing, talking too slowly or loudly, and definitely skip a sing-song tone to your voice. “They have additional needs as seniors, but they are adults and want to be treated that way,” he says.

Many of the needs are straightforward and practical in nature. Have meetings in the morning, when everyone is sharper, including the advisor. Be sure to have good lighting. Consider the accessibility of your office and your location. Are there ramps, motorized doors and elevators if necessary? Have furniture in your office that is easy to sit down in and get out of, such as chairs without wheels and substantial armrests. Ensure the font size of your paperwork is larger than 10-point, but not so big that it’s obvious they need extra help. Also review your communication materials, such as newsletters, to make sure you are not excluding stories about seniors.

As clients get older, they may not be as willing or able to come to you. “I keep Fridays open for house calls,” says Berton. “It’s a good thing to do because you can learn a lot about them, their family and their living situation.” For example, you can see how well the home is being cared for, which could indicate if the client is in need of help. “It’s often a good opening to a conversation.”

In addition to making it easier for older clients to interact with you, it’s a good idea to create a network of professionals who cater to the senior market. Seek out lawyers, accountants and tax specialists who concentrate on older clients, suggests Berton. “You may need to have alliances with people in the health or social work community for seniors with certain health needs.” You never know when a client will need some extra help that you can provide. Finally, Berton says reaching out to other advisors in your community who have a lot of older clients is a great way to explore problems and solutions.

Being thoroughly prepared to deal with your client’s aging and potential cognitive decline will not only make it easier on them and their families, but it will reduce your risks and make your job less complicated. Successfully navigating this period with your client can open up opportunities for new business with the children of your clients or their attorney.

But even if that doesn’t happen, it’s necessary for advisors with older clients to reflect on their business and see what they can do to make this time easier, less stressful and more enjoyable for them. After all, these should be their golden years.


Older clients require a special set of skills and an ability to work with certain types of investment products, says Berton. If your client base is getting older, be sure to ask yourself if these are the clients you want in your practice.

“A lot of people build their practices on sales of products,” he says. “Most would rather have accumulators than spenders. Some low-risk products, like GICs, are high maintenance and that may not be your strength.” If it isn’t, perhaps you can form a relationship with another advisor who is looking for senior clients and transition your older clients to him or her when the time is right.

Even though it’s rare an advisor will have to point out to a family that her client is losing his mental abilities, advisors with several older clients can notice patterns.

“If you’ve had a long relationship with your client, you might notice declines in cognitive as well as physical ability, and even in outlook and approach to life,” says Bourbonniere. As clients age, they will lose friends to disease and death—and this will impact their state of mind. “Watch for changes and the rate of change in their outlook on life. Repeated comments about not living long may be something to follow up on,” he says.

Bryan says she pays attention to how often her older clients need her to repeat details. “I’ve had to explain certain decisions multiple times. If they have forgotten something you’ve discussed three meetings in a row, you might consider [the possibility] they are losing their cognitive ability to make financial decisions.”

Berton says a surefire way to know your client is slowing down is if things don’t get completed, such as when “your client is not returning forms, or paperwork doesn’t come back signed,” he says. Kinnear says another sign is if a client isn’t as logical or takes much longer to make decisions.

Berton believes advisors will be able to recognize these changes in their clients fairly easily. “That’s the time to reach out to the family member with power of attorney and check on the client’s health status. Most of the time, the attorney contacts me before I realize there is a serious issue. If these things are happening for the advisor, the family or caretakers have noticed it.” Finally, says Berton, older clients have more time on their hands, giving the impression they require more attention. “They have more time to think about things and they like to reach out more,” he says. “So don’t fall asleep at the wheel. You will have to stay in touch more, especially when there is any sense of trouble.”

Leigh Doyle