On June 2, the SEC published an investor Bulletin on Planning for Diminished Capacity and Illness (the "Bulletin"). Previously, the SEC and FINRA issued a National Senior Investor Initiative. Clearly, FINRA and the SEC think that senior issues, such as diminished capacity, require a heightened focus by firms and individual advisors when it comes to advanced planning for diminished capacity.
Although the Bulletin is directed to consumers, the guidance provides you with an opportunity to better service your clients. Among other things, the SEC has recommended that this planning include the following:
- Organizing important documents such as: bank and brokerage statements, mortgage and credit information, insurance policies, pension and other retirement benefit summaries, and social security payment information.
- Assembling contact information for financial and medical professionals in one location.
- Providing emergency contact information to the financial professional.
- Considering the possibility of having a durable power of attorney prepared.
- Obtaining the assistance from a trusted family member or friend.
- Keeping all of your important financial information (i.e., bank and brokerage account information and contact people) up to date.
- Speaking out if something wrong happens.
Your client's implementation of each one of these action items can only protect you from a possible future claim that you took advantage of someone with diminished capacity. Work with your clients to make sure that they have adequately planned to address the possibility of diminished capacity. Either do it now, or pay for failing to do so later.*
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.