Protecting loved ones from financial abuse

With wealth accumulated over many years and potentially a reduced capacity for decision-making, senior citizens are prime targets for criminals and others intent on stealing their hard-earned nest egg. What can be done to help ensure your loved ones are safe?

Though high-profile cases like Bernie Madoff attract a lot of headlines, there are unfortunately a lot of smaller con jobs going on all around the country all the time. I wince with every new case uncovered and every indictment handed down because it reflects poorly on my profession (though most of these criminals are not even properly registered and thus not monitored by the regulators). So it is important to me to see these situations happen less, not only for my profession but also because it hurts my heart to see someone doing exactly the opposite of what I try to do every day.

The CFP Board recently released a “Financial Self-Defense For Seniors” guide that is an excellent resource. I encourage you to read it (it’s a quick read) if you have any elder in your life that you care about – it is that important. It outlines several situations where vulnerability exists, what to look for, and how to prevent it.

I would add one MAJOR thing that I am surprised has not been proposed by the regulators. In a majority of cases I read about, the criminal actually took possession of the elder’s money, instead of placing it at a third-party company (called a custodian) like Fidelity, TD Ameritrade, or TradePMR. By using a custodian, you can see independent of the adviser how much money is in the account and what it is invested in, and you get statements from them instead of the adviser. As an investor, this would be a non-negotiable requirement (I do this for 100% of my clients).

Do what you can to help prevent this terrible crime from happening. If you ever have doubts, suspicions, or questions about a suggested financial transaction, I would be happy to answer questions with no obligation.

Who do you know that cares for their elders and might need some ideas on what to watch out for? Be sure to share this with them!