section 1 - The American College Online Learning Center

a. Planning Point: Planners should be aware that elder financial abuse often comesfrom family members. Be careful who has power of attorney!b. Example: James, under the guise of taking care of his elderly father, abuses hispower of attorney to acquire assets for his drinking and gambling problem.c. Carefully screening caregivers and financial advisors (is the planner credentialedor properly licensed?) can help to avoid disaster.d. Planning Point: Remind clients that if it seems too good to be true, it probably is!e. Planning Point: Beware of people pressuring the client.13. Financial elder abuse risk can be minimized in the following ways:a. Clients must screen caregivers and planners carefully to ensure they are worthyof their trust.b. Having family members involved can lead to an open environment, which makes itharder for the client to be manipulated.14. The ethical side of elder abuse. (Video: What are the important ethical considerationswhen working with an older client? Tacchino, Moody, Duska)a. Elder abuse could be physical, psychological, or financial harm to a vulnerableelderly person.b. Statistics indicate that more financial elder abuse takes place because of familymembers than because of financial planners.c. A profile of a typical victim is someone who is in her 80’s, female, living alone,and cognitively impaired.d. The abuse may be brought about because the person is too polite to push backwhen necessary or because the person is lonely.e. Elder financial abuse goes unreported because people are embarrassed, they donot want to send a family member to jail, or they may lose caregiving.f. From an ethical standpoint the financial planner has three duties: 1) do not doharm, 2) prevent harm, and 3) do good.g. In order to meet his or her ethical duty the planner must have 1) the capability toprevent the action, 2) the proximity to the situation to act, and 3) the recognitionthat harm is possible.h. Professionalism requires intervention even if it means losing the client or havingyour advice ignored.i. Other solutions include 1) involving other people, 2) shedding light on the situation,3) communicating with the client and others, and 4) using prudence.SECTION 5: THE RISKS AND SOLUTIONS FOR BEING ILLPREPARED FOR RETIREMENTLO 5-5-1: Analyze unrealistic expectation risk and the other risks thatmake a client ill prepared to retire1. Unrealistic expectation risk is the false belief that adequate resources have been acquiredto fund retirement. Clients make poor choices because they were not properly educatedabout the consequences of insufficient retirement income planning. Your clients shouldbe concerned about the “leaping before they look” approach for a variety of reasons:a. One of the greatest threats to retirement security is the failure of clients torecognize that they should have been concerned about their financial ability to5.30