Financial Elder Abuse on Advisers’ Radar

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.