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AARP: Financial Professionals Need Training to Meet the Needs of Older Investors with Diminished Capacity

Advisors Say in Survey That Firms Should Require Training — But Most Don’t

November 10, 2011

Media Relations

AARP: Financial Professionals Need Training to Meet the Needs of Older Investors with Diminished Capacity

Advisors Say in Survey That Firms Should Require Training — But Most Don’t

Washington, DC – Most financial professionals think their firms should require training to address the challenges of working with older investors with diminished mental capacity, according to a survey conducted by the AARP Public Policy Institute.

The survey of 500 financial advisors and compliance officers shows that only a minority of their firms require training as part of the guidance and resources offered to financial advisors.

Growth of the 65-and-older population means dementias are becoming more prevalent. One out of eight people age 65 and over has Alzheimer’s and nearly half of Americans over age 85 suffer from it, according to the Alzheimer’s Association.

The savings of those older Americans are clearly vulnerable if these investors are served by financial professionals unfamiliar with the demands that mental impairment presents.

“Financial advice is critically important to investors approaching or in retirement,” said Susan Reinhard, Senior Vice President of the AARP Public Policy Institute. “Our research shows a real need for professionals to be knowledgeable about the sensitive impairment issues confronting some older investors.”

An AARP Public Policy Institute report releasing the survey findings calls for widespread training as part of a series of proposals for working with aging clients. AARP and the Financial Planning Association are offering a free 56-page guide, entitled “A Financial Professional’s Guide to Working with Older Clients,” that includes suggestions for serving older investors with cognitive impairments. The resource, which also includes practical information on other related issues for financial professionals working with older clients, is available at

In the survey, 83 percent of advisors and 78 percent of compliance officers said that companies should require advisors or agents to undergo training on issues related to diminished capacity. But only 33 percent of advisors and 24 percent of compliance officers responded positively when asked “are (you) currently required to undergo training on issues related to diminished capacity?”

The AARP report highlights the critical importance of adequate protocols for action when an advisor suspects diminished capacity.

The report points out that most financial firms have some protocols but these rarely provide guidance for working with “worst case scenarios.” Protocols also need to address when to delay decision-making on a transaction while resolving concerns about diminished capacity, the report said, and how firms can best handle privacy and liability issues.

“Individual financial firms should develop or modify their policies to maximize client privacy while protecting vulnerable clients—and monitor accounts to protect against financial exploitation,” Reinhard recommended.

The report urges industry associations to develop ethical standards for when advisors should take action to protect investors, create and disseminate industry-specific training resources on diminished capacity, and develop and publicize “best practices” for impairment situations.

It calls on legislators and regulators to consider requiring continuing education on diminished capacity and to consider developing model regulations on compliance with state privacy laws.

Federal and state administrative agencies were urged to “reach out to (the) financial community” on the issue, and consumer and professional groups were asked to consider providing public education for older investors, family members and caregivers on risks from diminished capacity.

View the full report here:

About AARP
AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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