For most people, entering retirement is a dream come true. How could it not be? There’s ample time to travel, spend time with family, and you don’t have to worry too heavily about your financial stability. However, as more and more members of the baby boomer generation hit their retirement years, a new problem begins to emerge.

The issue at hand? Dementia. With the population aging, the number of sufferers is projected to rise by 40% to 78 million by 2030.

Financial advisors are beginning to feel the stress of whether or not their aging clients are showing early signs of the psychological disorder. To better gauge whether or not their clients in fact are, advisors need to be looking for signs of dementia in older clients, such as repeating themselves or not grasping what they’re being told. However, many feel overwhelmed and unqualified to spot the warning signs—even though they often suspect problems well before the client’s own family does.

So how are financial institutions and their advisors tackling this growing problem in a proactive way?

Current advisor solutions are reactive

The truth of the matter is this—Firms and advisors everywhere are scrambling to find a solution to this growing and soon-to-be prevalent problem. With the fiduciary responsibilities held by financial advisory professionals, the current, reactive solutions simply won’t cut it anymore.

One often-used strategy is to quiz clients with questionable mental capacities on information and matters already on their files, such as being able to clearly name their power of attorney (POA), lawyer, accountant, or even providing information about their spouse. 

“The problem with testing memory is that unless you know what the answer should be, it’s difficult to know whether there’s a memory loss issue,” says Greg MacIntosh, Vice-President of Wild Rose Group of Cos. “Sometimes, it could be temporary because of a medication and sometimes it can be part of a more progressive problem.”

Another route is to involve family members first, but in some cases, clients may be estranged from their families. In others, family members may be part of the problem as relatives try to dip into the clients’ accounts.

Additionally, unless advisors have spent a considerable amount of time face-to-face with their clients, short interactions and check-ins won’t prove to be a true barometer for noticing any psychological or cognitive impairments.

None of the current solutions seem to be sustainable or even effective in the long run—so how can the older population ensure their accounts and their estates remain safe?

Enter the Canadian Securities Administrators

There are nearly 10 million new cases worldwide of dementia every year, and an estimated 6.2 million Americans age 65 and older living with it in 2021. It’s no wonder that clients with dementia and the issues that come with them are growing faster than advisors can or are able to deal with. Thankfully, in Canada, the Canadian Securities Administrators (CSA) have stepped in.

In July of 2021, the CSA introduced new guidelines that now require registrants to take reasonable steps to obtain the name and contact information of a Trusted Contact Person (TCP). This TCP would be someone advisors could alert if they have concerns about a client’s ability to make financial decisions or suspect their client is being exploited. This TCP would help advisors protect a client’s financial interests and assets. It’s important to note that a Trusted Contact Person does not have the authority to make transactions on a client in question’s account.

Advocis—the oldest and largest voluntary professional membership association for financial advisors—has urged its members to take the initiative to put a TCP in place. However, the client is under absolutely no obligation to provide one. Ultimately, advisors can defer matters to whoever has been appointed as POA, who does have the authority to manage someone’s accounts if a medical doctor has determined that they’re unable to due to mental or physical reasons. However, clients are also under no obligation to appoint a POA either.

Greg Pollock, President and Chief Executive of Advocis, recently told The Globe and Mail, “you have to put these things in place when the client is of clear mind. Once something has occurred where that’s not the case, it’s really too late.”

Still, even with these guidelines in place, it feels as though neither clients nor advisors are adequately protected. However, there is a solution that can provide the protection both parties are looking for.

Managing critical information with a Digital Vault provides protection for advisors and clients

As we continue to power forward into a digital age, technology can provide the tools needed to address these issues upfront. Digital Vault solutions provide an adequate solution for just that.

First and foremost, most Digital Vaults offer advisors and their clients a way to securely deliver, store, and manage important documents, files, and critical information. With world-class security and compliance as a core competency, advisors and firms can gain confidence knowing that their sensitive information is kept safe and secure.

Second, Digital Vaults allow clients to have complete control over who gets access to each of their accounts, and when. As an example, FutureVault’s patented Trusted Advisor permissioning provides family members and other third-party service professionals with access to specific information if granted permission. This, in turn, streamlines necessary processes in a transparent and compliant way as clients can delegate the management of certain files to selected advisors, all being tracked securely within the Vault.

Lastly, Vault platforms allow firms to create standardized templates and checklists as a way to streamline the process around information and document collection at various stages in the advisor-client relationship, including initial onboarding. This makes it incredibly easy and efficient to collect information, including being able to indicate and name a Trusted Contact Person almost immediately.

Moving forward with FutureVault to protect important information

FutureVault’s Digital Vault Platform is equipped with the right tools and features to help advisors connect with their aging clients and streamline the way they collect and manage information assets. By providing both families (clients) and advisors with secure Digital Vaults, we’re empowering firms to significantly improve operational efficiencies, get ahead of compliance and audit obligations, and ultimately, enhance the level of service offering by being able to focus on what matters most, clients.