Do any of your older clients have a problem with alcohol or addiction? You may be surprised at the prevalence of these problems in our older population.
Opioid addiction is not just about young people. Some sources tell us that opioid dependency is present among people of all ages, which can include your aging investor clients. According to a treatment facility exclusively for adults over age 50, the number of adults over 50 with substance abuse problems will double from 2.5 million in 1999 to 5million in 2020.
Why should this matter to you, as an advisor? There are several reasons why this client health issue is important, particularly in retirement planning. First, any substance abuse problem can affect financial decision-making capacity. Dependency can lead to desperation, related physical issues added to existing age-related issues and loss of capacity to make reasonable and necessary judgments about any investment. Further, it can destroy family relationships, just when you may need family members to get involved in helping an older client make essential decisions about the portfolio and needed adjustments.
Your aging client may not tell you about being substance dependent but sometimes you can see the signs. They may confess to “a bit of drinking too much”, or feeling depressed about their future. Perhaps the client comes to your office reeking of alcohol. Or you see them taking pills right in front of you, with a shaking hand. That behavior doesn’t look to you like just some benign blood pressure pill or the like. There’s a frantic air to it, needing that pill fix. You can’t be sure but your gut tells you something isn’t right. Listen to your gut.
Elders with a drinking problem are not often talked about but we certainly hear about the issues they cause at AgingParents.com, where we work with families to solve problems with the elders and their adult children. According to publications at the National Institutes of Health, prevalence rates for older-adult at-risk drinking (defined as more than 3 drinks on one occasion or more than 7 drinks per week) are estimated to be 16.0% for men and 10.9% for women. There is also a substantial proportion of the older-adult population who are binge drinkers (generally, 5 or more drinks per episode). This is not some small problem among us.
You’re not a doctor, nor a mental health professional. Why should you care? Should you do anything about a client who appears to you to show signs of substance abuse risk? It can affect your client relationship if you do nothing. Your client can accelerate age-related physical decline faster with substance problems than if they aren’t part of the picture. If they decline too much, you can’t work with them. If the client can’t communicate or can’t make decisions, you may have to get rid of the client and the fees you earn on managing that portfolio. The client can ruin your connection to them.
Have a plan
You can think ahead and develop a plan if you suspect these issues are affecting your client.
One essential strategy involves being prepared to reach out to your client’s family or close friends for help. Many, though not all investors have done some estate planning. Often they wanted to protect their legacy and had a trust and will drawn up by an attorney. Imagine that all their financial assets you manage are in a trust. The trust will name a successor to your client, who is the person who decided what the trust should contain. The successor trustee can assume authority while your client is living, when he or she becomes impaired. Trusts are written in many ways with no standard applied to when an impaired trustee, your client, must or can step down and let the successor take over.
What to do first
You can speak with your client about whether they have done estate planning. This should be part of your job anyway. You don’t want them to fail to do this and have too much of their assets unnecessarily given to taxes after they pass or have them go where the client didn’t want them to go. Educate them. That’s what you do as part of your services. While you are on the question, find out whom they’ve appointed as a successor trustee (assuming there is indeed a family trust). Then ask for permission, in writing to communicate with that successor trustee, whom they chose, “in case of emergency” or some other event that may cause them to be unable to function, such as a stroke. For help in getting the permission right, reach out to us at AgingInvestor.com. We can help!
How to use permission to communicate with a third party
That permission will give you one essential thing: the ability to tell the appointed person that you are worried about what you have observed (be specific; e.g., strong odor of alcohol, forgetting appointments, etc.). You can simply request their help. It’s up to them to take it from there. You may not be able to solve any problem your client has but with this kind of communication, you are doing all you have a right or obligation to do to be of service. And who knows, your contact with the right and motivated appointee, often a family member, could be the trigger that starts their stepping in to assist with financial decisions.
Try this and you’ll sleep better at night rather than worrying that your impaired client may do something dumb with their money, and expose you to scrutiny by heirs for your failure to act. This simple and proactive step can apply not only to a client you think may have a problem, but to any aging client. Make it your practice. It can prevent your loss of management of the client’s assets.
