Financial planners must learn how to recognise potential signs their elderly clients are being abused, and develop robust processes and systems for dealing with the technical, legal and ethical issues this can present, the 2017 FPA Professionals Congress has heard.

Financial Ombudsman Service (FOS) lead ombudsman Dr June Smith told a congress workshop that even when advisers know the right thing to do, issues of elder abuse can cause confusion around when to do it.

Smith said a recent FPA submission to the Australian Law Reform Commission stated more than 40 per cent of financial advice FPA members give is to individuals aged over 60.

“What we know from our work in 2017 is we have had to respond to the Victorian royal commission on family violence, a subset of which is elder abuse,” Smith said. “And in our work on that project and our work on disputes, what we’ve seen is that everything is not black and white, and that often advisers are doing the right thing but are struggling with what to do when they see conflicts between members of the family, what to do when they’re not so sure if their client has the capacity to make informed decisions, what to do when they are dealing with a husband and wife and only one is giving instructions or only one is authorised to access the accounts.”

Smith said these issues are not just coming up in Australia, but are increasingly common around the world as populations age and as greater volumes of wealth are transferred from one generation to the next. She noted that a recent FPA submission to the Australian Law Reform Commission stated more than 40 per cent of the financial advice that FPA members give is to individuals aged over 60, making it critical that advisers stay awake to the possibility that elder abuse is happening to one of their clients.

“As advisers and as leaders in professional practices, you often get disputes, as we do at FOS, in relation to intergenerational advice, but sometimes it starts out as something else,” Smith said. “It can be a complaint from a family member or from someone holding a power of attorney, about whether or not the investment strategy was suitable, whether or not there have been appropriate earnings in relation to overspending on an investment strategy.”

Smith told the workshop there are some common indicators that elder abuse may be occurring:

  • If a client engages in financial activity that is unusual, erratic or out of character
  • If the client is one day suddenly accompanied to an interview by a new acquaintance
  • If transactions are entered into by a care-giver that do not appear to be in the interests of the client
  • If a client is not allowed to speak for themselves or engage in transactions
  • If mail, email, account statements and the like are no longer delivered to the client’s home or contact details.

Smith said FOS has developed a process document on elder abuse that advisers can refer to for guidance and tips on how to deal with situations where they believe abuse may be occurring.

She used the workshop to ask delegates to address a specific case study, involving a client whose capacity is in question and whose assets may have been improperly accessed by family.

The results of the discussions will be collected by FOS and developed into a “top 10 tips” document for congress delegates.

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