My parents were in their mid-40s when I was born. By the time I was a senior in high school, my mom and dad were already considered senior citizens. But both my parents were intelligent, thoughtful, practical people blessed with razor-sharp wits – especially my dad, who had a particularly keen sense of humor. Watching my parents age while I was still so young was a surreal experience. As time went by, and they were getting into their 70s, I could see them taking longer to ponder simple decisions. Almost anything new that seemed overly complicated became a bit annoying to them.

Most of us will watch our parents slow down with age. Then, one day, the tables suddenly turn, and it becomes our turn to watch out for them. This goes beyond the obvious physical things like making sure their sidewalks are shoveled during the winter. Whether they’ve shown any signs of serious cognitive decline – or just the occasional hiccups in memory – protecting aging loved ones from physical harm isn't our only job. It’s also up to us to watch out for predators who could threaten their financial wellbeing and security.

Protecting your aging parents means staying on top of activity in all accounts and knowing who has access to them. A fiduciary financial advisor will also keep their information safe and help protect their money. 

Finding a financial advisor you can trust who has the expertise you need and is committed to working in your best interests can be overwhelming. That’s why you should consider Wealthramp’s free financial advisor matching service. Every advisor in the Wealthramp network is rigorously vetted. Answer some quick questions, review your advisor matches and schedule a free meeting with any or all of your matched advisors. Wealthramp will never sell your data. You won’t get pushy sales calls from them. 

Seniors: The Most Common Victims of Scams

The National Council on Aging notes that at least 5 million cases of elder financial abuse are reported in the U.S. every year. It's likely much worse. Researchers estimate that law enforcement only learns about one out of every 25 cases.

The True Link Report on Elder Financial Abuse pegs the amount of losses seniors suffer from financial abuse at $36.5 billion, but the true amount is likely much higher than that, CNBC reported this year. Seniors control about 75% of the wealth in the U.S., and the reality is that older people can’t afford to lose money because they don’t have time to make up losses from scams.

Financial Abuse May Be Hiding in Plain Sight

Victims tend to be more affluent, but in truth, any middle-income senior can fall victim. So what does financial abuse look like? These are just a few smoking guns:

• someone changing their will or other legal documents
• money or property being used without their knowledge or permission
• forged signatures
• someone borrowing money without repaying it
• fraudulently obtaining a power of attorney or guardianship
• fraudulent insurance or investment schemes
• sweepstakes and lottery scams requiring that they pay money to collect their winnings
• identity theft
• fake health or pharmaceutical products
• unnecessary or predatory lending practices

But it can also be much more subtle. A broker, insurance agent or other financial advisor may be pitching complicated investments that are supposed to provide security and be low risk but are really intended to make the advisor money in huge upfront commissions and ongoing fees.

Outsmarting the Predators

Adult children might not always be able to be there for their parents. They might not have any reason to notice, but there are some things you can do to watch out for them even from afar. One of the most useful steps to take is to pay attention to who's watching their finances and who's aware of how much money they have.

For example, the friendly neighborhood banker may convince them to cash in their FDIC-insured certificates of deposit and instead buy variable annuities that have restrictions and high costs. They might tell your parents that understanding what’s in the fine print isn’t necessary when you have someone from the bank right there to highlight all the benefits. Your mom or dad may believe the banker is just looking out for their best interest when he or she is actually a salesman looking out for commissions.

You probably can’t be there to monitor every transaction or investment your parents make, and you don’t have to. You also don’t need to be a financial investigator or an expert. Find your parents a real financial advisor who practices as a fiduciary and will sign a fiduciary oath.

The fiduciary role will go a long way to help weed out tricky salespeople. It's important to understand the difference between the suitability standard and the fiduciary standard. The first means that an investment is suitable for your parents, but just because an investment is suitable doesn't mean that it's beneficial. Advisors who follow the much higher fiduciary standard, however, are truly looking out for your parents and not just trying to pad their own pockets by selling investment products that pay them hefty commissions.

Vet that advisor by looking at his or her background records and overall approach to retirement planning and investing, which should be fully transparent, with all advisor fees fully disclosed in writing. Then, keep an eye on everything they're doing. Financial advisors in the U.S. are supposed to be licensed or registered, and you can check them out via the SEC's Investment Advisor Public Disclosure database and FINRA's BrokerCheck site. Enter their name or their firm's name. Advisors should also be willing to give you their Central Registration Depository number to make the searches even easier.

Simple Steps to Avoid Problems

Here are some ways to help your parents make smart financial decisions:

• Make choices based on best value: The lowest cost isn’t necessarily the best deal. Compare what you’re getting before you choose an advisor.
• Take a long-term view: Financial planning is a big-picture, long-term endeavor. No financial advisor will promise that you’ll get rich quick.
• Be honest about your needs: Analyzing and talking about what you actually want and expect as you age is a crucial part of financial planning. If leaving a big legacy matters, a fee-only fiduciary advisor can help ensure that dream. Or if you want to enjoy your money in your retirement, being honest about that goal will shape your plan.
• Listen to the experts: If you’re paying for expert advice, use it. While you might not agree 100% with your advisor’s recommendations, if you don’t use most of the advice, you should probably partner with a different person.

The Money Talk

Your parents watched over you when you were growing up, and it can be a bit of an awakening when you realize that it's your turn to watch out for them. But just being aware is the most critical first step, so it may be time to talk. Chances are though that they will want to discuss their estate plans, and that’s an excellent opening to ask questions about how their bank accounts are organized and how they feel about their investments. Another way to introduce the subject is asking if they’re happy with their financial advisor. Anytime there’s an opportunity to talk about their overall health and wellbeing can also be a good time to gently bring up their finances. It’s especially important to get your mom to open up about her financial concerns because like many women, she may have relied on your dad to make the big investing decisions. Women control more than $10 trillion (about 33%) of total U.S. household financial assets, and it’s expected that in the next five years that amount will rise to $30 trillion. According to TIAA-CREF, Baby Boomer women lean heavily on outside advisors or family and friends for financial guidance.

Realize that your parents may have already been victimized without telling you about it because they may feel embarrassed. Many older people don’t want to report such incidents, either to their own adult children or even to the authorities. Take the initiative and check in on your parents because they may feel uncomfortable about taking the initiative.

Good Steps to Take

I started the conversation about money when I knew my parents wanted to talk to me about their health. Every family is different, but these are the steps anyone should consider that will help simplify your parents’ financial lives when they get older.

• Find all accounts including bank and brokerage accounts, insurance information, and safe deposit boxes and ask for “view only” privileges so you can monitor activity.
• Determine who should pay the monthly bills so they are paid on time, automate the process, and ask the bank if they offer email “alerts” that let you know when balances fall below a certain minimum.
• Reach out to an attorney and respectfully discuss setting up a power of attorney or a living trust.
• Consider bringing in a vetted, fee-only, fiduciary financial planner to analyze all of their investments, manage cash flow needs, and create a plan to maximize their savings.

My parents passed away about ten years ago, and when they were getting up there in age, I was nervous to bring up the subject of their finances. When I did find the right time, it came from a place of love and respect, and I think they knew that. I also believe my dad was very relieved because I don’t feel that he would have ever come to me for help for himself. But he had deep concerns for my mom, and that was my opening. Looking back, I now realize the details of their financial life was a burden for them, and I’m thankful I had the guts to talk openly with them.

Finding the right financial advisor can be challenging. Let Wealthramp help you find the right advisor who will help you with your personal financial needs and situation.