3 Tips to Prepare Proactively for Clients’ Cognitive Decline

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As a financial planner, you may not be able to team up with your clients’ doctors to assess their cognitive decline, you can proactively plan for cognitive decline in case it does happen. Cognitive decline can affect your clients’ finances in several ways.

“Cognitive decline is becoming one of the most pressing challenges faced by families,” Daniel Kern and Renée Kwok wrote in the recent Financial Planning magazine article, “Cognitive Decline: The Boomer Issue that Families Aren’t Discussing,” which also reported that financial literacy scores decline by about 1 percent per year after age 60.

A resource co-produced by FPA and AARP called “A Financial Professional’s Guide to Working with Older Clients,” (available at AARP.org) provides these tips for practice planning:

1.) Encourage clients to rehearse lifestyle changes. Help clients identify some of the transitions they’ll have to make as they age—for instance, will they need to downsize where they live, how often they travel, or their hobbies? Also, what kind of help might they need as they age?

2.) Develop a disaster plan when your client is healthy. Identify worst-case scenarios and put a disaster plan in place. For example, have a plan for what to do if your client has a stroke that leaves them cognitively and physically impaired. Educate the family members on this plan and determine caregivers. Ensure estate planning documents are in place, and get permission to contact their loved ones and to share information in writing in case disaster strikes.

3.) Keep an eye out for symptoms of cognitive decline. Pay attention to whether your client has any changes in behavior or becomes forgetful. Are they losing focus? Are they excessively forgetful? The permission you obtained in writing to contact the family will also come in handy if you need to discuss your concerns with their loved ones.

Ana Headshot

Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.

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