Friday, February 13, 2009

Financial advisers, brokers, the elderly, and impairment

SmartMoney has an interesting, if short, article by Roya Wolverson, dating back to Nov. 2008 on who is responsible for a senior’s finances when the senior has Alzheimer’s or some dementia. “The law isn’t always clear” it says.

Financial advisers (and I presume licensed financial planners) are supposed to have fiduciary responsibility for the senior’s accounts that they manage. My large financial companies and insurance companies (even now, during the crisis) hire and train such professionals. There can be some questions about conflict of interest in how they are paid. But they are supposed to be responsible for end results. They must put their clients’ interest ahead of their own.

Brokers, however, are not necessarily responsible for results. They must present all the products are available. It’s not clear if they are accountable for suspecting that a client is impaired.

There are rules governing people working as financial advisers and brokers at the same time. Sometimes they cannot, but the compliance issues are complicated and sometimes unclear.

The link is here.

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