Financial Elder Abuse on Advisers’ Radar

Protecting aging clients is advisers’ foremost ethical concern.

Eighty percent of retirement income planning professionals are concerned about protecting their clients from financial elder abuse, according to a survey by The American College of Financial Services. In fact, of all of retirement advisers’ ethical concerns, this is the leading worry.

Although 64% believe the overall ethical climate of the industry is in good hands, the same percentage believes that retirement income professionals are not adequately trained. Sixty-eight percent do not think that advisers are keeping up with legal changes that impact their clients’ retirement income plans.

Eighty-eight percent think their clients may not completely understand their retirement income plans, and 85% think they do not understand other financial products and services.

Nonetheless, only 6% think advisers lie outright to their clients, and only 27% think that they overcharge clients.

“Retirement income planning is extraordinarily challenging,” says Jamie Hopkins, retirement income program co-director at The American College. “Retirement income professionals are expected to manage a variety of client risks, legal changes and ethical issues when developing a comprehensive plan. The survey responses show that advisers are well aware of the challenges but worry that they industry as a whole lacks the proper training and education required to effectively serve aging clients.”

In fact, a 2015 survey of certified public accountants (CPAs) by the American Institute of CPAs found that 47% had witnessed an increase in elder fraud and financial abuse in the previous five years.