Welcome to Financial Advisor IQ

Report Claims Financial Elder Abuse Is Top Advisor Concern

By Tamika Cody March 31, 2016

Retirement income advisors are especially worried about protecting their elderly clients from financial abuse, according to a new study.

The survey, by the nonprofit private educational institution the American College of Financial Services, found protecting aging clients is the top ethical concern for advisors.

Out of the 244 individuals who took part in the Ethical Issues in Retirement Income Planning Survey, 82% indicate concern about financial abuse of the elderly.

Yet some of those surveyed don’t think financial elder abuse is widespread, and only 28% believe that it’s a common occurrence.

Advice industry consultant Stephen Gardner is in the less-worried camp. “I don’t see elder abuse as that big of a concern,” he says. “For the most part, advisors try to do what is best for their clients, especially older clients who can’t afford to take loss or go without income.”

Pete Carmasino of NewBridge Retirement Advisors in Marlton, N.J., thinks elder abuse is “definitely a problem,” but says he’s never seen it firsthand. Carmasino declined to share how much assets his fee-based firm manages.

Aging clients who may be at risk of financial abuse should be able to turn to industry professionals, including advisors, attorneys and their accountants, says Carmasino.

But many advisors surveyed are concerned that clients and FAs alike are ignorant about elder abuse.

The study also finds 68% of those polled are troubled that advisors aren’t keeping up with legal changes impacting clients’ retirement income, such as refinements to ERISA and new requirements for receiving Social Security and Medicare systems.

Additionally, the report claims 64% of retirement income advisors are worried they’re “unable to perform their jobs because of inadequate training.”

Some 88% fear clients can’t properly comprehend their retirement income plans, and 85% are fretful that clients don’t understand the products and services they are offered.

For Jamie Hopkins, co-head of the retirement income program at the American College of Financial Services, the survey shows advisors have a lot of balls in the air.

And though they’re “well aware of the challenges” to developing comprehensive retirement plans, they worry “the industry as a whole lacks the proper training and education required to effectively serve aging clients," Hopkins says in a press release.

Yesterday, the North American Securities Administrators Association announced it’s offering a training program for state regulators to help broker-dealers and advisors identify financial abuse. The training program will be available to NASAA members in April.