Guide to Elder & Vulnerable Client Protection for Third Party
Administrators
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Purpose of the Training
Protecting our Clients & Complying with State and Federal Laws
Recognizing Cognitive Impairment
Recognize Elder or Vulnerable Client Exploitation
I.
What is Cognitive Impairment
I.
Red Flags
II.
Who is Impacted
II.
Prevention
III. Warning Signs
III. Resources
IV. Who is Responsible for Detecting
IV. When to Start Discussing Methods
of Protecting Assets
V.
How Can We Protect Our Clients
a.
Authentication Practices
b.
Reporting
c.
Investigating
VI. Available Resources
V.
a.
Trusted Contacts
b.
Powers of Attorney
c.
Guardians
How to Escalate
VI. Contacts
Protecting our elder and vulnerable clients is serious business.
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2
Senior Facts
 There are 75 million baby boomers in the U.S.; by 2030 21% of the population will
be 65 years old or older, according to a census bureau report in June 2015.
 On January 1, 2011, the oldest members of the baby boom generation turned 65;
10,000 will turn 65 each day until the year 2030 (The Baby Boomer Number
Game, U.S. News & World Report, March 2012)
 Baby boomers control $16 trillion in household income (LIMRA Regulatory Review,
April 2011); in 2010, according to a MetLife survey there was a $2.9 billion loss in
financial abuse of elders. Abuse is expected to increase, and much goes
unreported.
 One in every nine people in the U.S. age 65 or older has Alzheimer’s; 5.1 million
with the disease in 2014 (2014 Alzheimer’s Disease Facts and Figures,
Alzheimer’s Association, )
 Approximately one in 25 adults (or around 10 million) in the U.S. experiences a
serious mental illness in a given year that substantially interferes with or limits one
or more major life activities.
–
http://www.nefe.org/what-we-provide/research/search.aspx?from=&to=&topic=0&subtopic=-1&year=0&page=2
 52% of abuse is by caretakers, including family members; 22% is by third parties,
according to a recent Allianz study on aging.
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3
Legal and Regulatory Landscape
Nevada
IMPORTANT:
Regulators have emphasized the importance of identifying, reporting and
responding to suspected financial exploitation under existing regulations. New laws and
regulations are being proposed by federal and state regulators to help protect the elderly and
vulnerable adults from exploitation.
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4
What is Elder Exploitation
 The North American Securities Administrators Association defines
“exploitation”:
– The wrongful or unauthorized taking, withholding, appropriation, or use of money,
assets or property of an eligible adult [defined as 65 years or older or a person
subject to adult protective services in the state of residence]; or
– Any act or omission taken by a person, including through the use of a power of
attorney, guardianship, or conservatorship of an eligible adult to:

Obtain control, through deception, intimidation or undue influence, over the eligible adult’s
money, assets or property to deprive the eligible adult of the ownership, use, benefit or
possession of his or her money, assets or property; or

Convert money, assets or property of the eligible adult to deprive such eligible adult of
ownership, use, benefit or possession of his or her money, assets or property.
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5
Elder and Vulnerable Clients - Prime Targets for Exploitation
 Easy targets
 Many live alone and are socially
isolated
 Dependent on others
 Caretakers have access to account
and personal information
 Mature assets/wealth
 Not accustomed to technology
 Less likely to report being a victim
 Could be suffering from other forms
of abuse
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6
What is Cognitive Impairment
 “Cognitive impairment is when a person has trouble remembering, learning
new things, concentrating, or making decisions that affect their everyday life.
Cognitive impairment ranges from mild to severe. With mild impairment,
people may begin to notice changes in cognitive functions, but still be able to
do their everyday activities. Severe levels of impairment can lead to losing the
ability to understand the meaning or importance of something and the ability to
talk or write, resulting in the inability to live independently.”
Source: www.cdc.gov
– NOTE: Not every temporary loss of memory or mental clarity indicates diminished
capacity. Other factors that may play a role include:
 Lack of Sleep
 Medication
 Diet
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7
Understanding the Warning Signs of Cognitive Decline
 Unusual or sudden memory problems
 Sudden change in character or habits
 Unusual or sudden difficulty in
understanding financial terms or
concepts
 Requests for distributions to third
parties or other unusual withdrawals
 Frequently repeating orders or
questions
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8
Preparing your Clients
Take steps now to help protect our clients, before any issues arise regarding
diminished capacity or other age-related problems
 Prepare clients
 Obtain a trusted contact, preferably a nonfamily member
 Obtain emergency contact information
 Obtain privacy waiver
 Educate client or refer them to an
attorney with regard to techniques and
legal alternatives such as:
–
Power of Attorney
–
Create a Trust
–
Estate Planning
Financial and insurance professionals assisting elder and vulnerable clients are in a unique position to
detect and help prevent, where possible, financial abuse.
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How You Can Help
Important ways you can help a client who shows signs of cognitive impairment:
 Get someone else involved.
 Ask the client to provide a name of a trusted contact.
 Keep the conversation simple – don’t over communicate details and speak clearly.
 Be patient – show you understand how the client feels.
 Do not try to interpret what the client says…..Don’t assume.
 In face-to-face meetings, sit close and make contact.
 Repeat, rephrase and summarize the conversation.
 Use caution dealing with caregivers, especially a new caregiver.
 When in doubt, escalate to your supervisor/manager and contact the EVCC for
guidance.
–
AIG Consumer Compliance Elder and Vulnerable Client Care Unit (EVCC) is an intake
center for reports of potential elder and vulnerable client exploitation concerns as well as an
employee resource center for guidance on the handling of elder and vulnerable client issues.
Many forms of dementia are progressive.
Act quickly at the first signs of an issue.
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Keep Privacy Considerations in Mind
Privacy Considerations
You may be tempted to enlist the
client’s spouse, child or close friend to
help you in your interactions. Before
you can do so, you MUST receive
specific authorization from the client.
This can be in the form of a Power of
Attorney or written authorization.
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Document and Follow-up
 Document all conversations and meetings:
– Be specific and non-judgmental in what you write; as with all file notes, these could
wind up as evidence in a complaint situation, legal case, or arbitration.
 Use summary letters:
– Follow-up to client meetings.
“Client asked three
times in a one-hour
meeting who the
beneficiary is on her
policy”
“Client was 30
minutes late because
he got lost on the way
to the office, even
though he has been
here many times
before and is usually
on time or early”
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Document, Document, Document!!!
To be able to answer questions that might arise about the suitability, or
appropriateness of sale or the handling of a transaction, you should have
documentation in the client file establishing:









The transaction requested.
Individuals involved in the conversation.
The information collected; authentication process used.
Documents collected.
The review process for determining appropriateness of the sale/transaction.
Review process for determining that recommendations, if any, were suitable.
That the risks and costs were discussed with and understood by the client.
Concerns identified.
How concerns were escalated and the actions taken.
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13
When to Escalate….Potential Signs of Exploitation
In the following circumstances immediately report to EVCC at the Helpline:
1- 844-422-1945 or [email protected]
• Unusual or multiple requests for change of
beneficiary or address on client’s accounts;
changing the beneficiary from a family member
to a third-party or from multiple children to just
one; death bed beneficiary changes.
• Signature on request form does not appear to
match signature on file; abrupt changes made
to those who can access accounts (e.g.
Change of Power of Attorney).
• Transaction requested is not a typical
transaction for the client; client cannot provide
valid reason for transaction; there is a
disregard to penalties.

Transaction requested is not in the best
interest of the client; client suddenly has an
inability to make payments on the account.

Client is speaking to third-party and seeks
answers to your questions from a third party
rather than answering the questions directly.

Caller/client appears confused, is forgetful,
asks to repeat questions several times.

Third party with access to the account will not
allow you to speak directly with the client or
shows excessive interest in client’s account.
Issues around elder and vulnerable clients can be ambiguous and unclear. Regardless, report matters
where you suspect financial exploitation to your manager and the EVCC. When in doubt……report out!
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14
Immediately escalate matters where elder or
vulnerable client financial exploitation is
suspected to the EVCC.
Various states have immediate notification requirements triggered by the date the
financial exploitation is detected. Not immediately reporting and escalating
matters of elder or vulnerable client financial exploitation could put the company
and the client at risk.
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15
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