We are born to trust.
Without trust, we would never have learned to walk, talk, take care of ourselves and others nor learned to give our value to the world through the relationships we foster and the careers we pursue.
If we have had a good experience of trust along the way, it is natural to assume that we can continue to trust – especially as we age. Yes, we may get burned occasionally but we are usually resilient enough to not let that throw us off course. However, we need to be aware of and plan for those situations where broken trust can have devastating consequences.
The National Institute for the Care of the Elderly (NICE) published a study entitled “Into the Light: National Survey on the Mistreatment of Older Canadians 2015.” It found that about one in 12 Canadian residents aged 55 and older experienced elder abuse in the previous 12 months. For 30 per cent of those cases, the abuse was financial. That translated into 244,176 Canadians fending off demands for their money, fighting to access their money and sometimes losing their money – all in a single year!
In response, the Canadian Securities Administrators (representing all of Canada’s securities regulators) recently recommended that advisors ask their clients for the name of a Trusted Contact Person (TCP) that advisors can contact if they have any concerns about financial exploitation or diminished cognitive capacity.
Please understand that this is different from a Power of Attorney (POA). With your prior authorization, POAs have the power to make decisions on your behalf under certain circumstances, such as if you become incapacitated. Sadly, POAs themselves are occasionally suspect in cases of financial abuse. Rather, a TCP can be considered simply a trusted friend whom a financial advisor can reach out to as a resource in helping to navigate tricky situations where financial abuse may exist.
A TCP must be someone who has earned your trust and whom you are confident will act in your best interests. When considering who might fit this role, think about how they would react if your advisor expressed concerns about your recent financial decisions or memory lapses. Would the potential TCP listen to your advisor with an open mind? Just as important, would you listen to this person if he or she raised those concerns with you?
Elder abuse is a tragic reality for too many seniors. Naming a TCP allows your advisor to call the person you would prefer if he or she suspects something is amiss. It is one way you can provide an additional safeguard for your money and it is an important part of good financial planning. Consider sharing this option with your loved ones who could also benefit from an additional layer of protection.
If you would like to learn more, please reach out to us through the website link below and request our TCP Checklist which you can share with those you care about.
This column is part of a monthly series courtesy of Richard Vetter, founder of WealthSmart Inc.