This news service talks to a UK-based law firm about the problem of "elder abuse" – a term covering a variety of topics. Adults aged over 50 control more than 70 per cent of the nation's wealth. The stakes for potential misappropriation and loss of assets through abuse are high.
This news service has published articles and commentaries on how the wealth industry must wake up to the issues caused by cognitive and physical decline in old age. With trillions of dollars and the equivalent being transferred by the Baby Boomer generation, there’s a pressing need to ensure that older people’s wishes are treated respectfully and that their financial interests are protected. The prevalence of diseases such as Alzheimer’s for example is, sadly, all too real for millions of people.
Last week, this area was marked by World Elder Abuse Awareness Day. The UK law firm Collyer Bristow recently spoke to this news service about these matters. Samara Dutton, partner at the firm who specialises in private wealth, talks to WealthBriefing group editor Tom Burroughes.
WealthBriefing: The term "elder abuse" covers a number of
topics and with families and finance, for example, it goes into
areas such as control and transfer of assets, the use/misuse of
wills, etc. Can you first of all give me a definition of what
"elder abuse" means in the context of this
Dutton: The World Health Organisation has a helpful definition of elder abuse which is “any single or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person.” This definition covers different types of elder abuse, including physical abuse, emotional abuse, sexual abuse, financial abuse and neglect.
Of these, clearly it is financial (or economic) abuse which has the closest nexus with the wealth management industry. Financial abuse in the context of elder abuse involves the unauthorised or improper use of an older person’s money, property or assets. It includes scams, fraud, theft and the exertion of undue influence (whether through threats, intimidation or the promise of companionship/affection) over financial decisions relating to that person, such as what to include in their will and who should own their home. It also covers the appropriation of decision-making powers via the (unauthorised or improper) use of Lasting Powers of Attorney or deputyships.
In your judgement, how big a problem is elder abuse? We
read occasional stories about fights over wills and contests over
inheritances, and sometimes age-related issues, including
dementia, come up. Do you have any metrics or evidence you would
cite as to how big the problem is?
Certainly it is a big problem. But there is difficulty in assessing just how big because abuse of this nature is so widely unreported. Financial abuse in particular is often at the hands of family members or carers on whom the older person in question relies heavily making it very difficult for them to speak up, assuming that they are cognisant of what is taking place.
A survey commissioned by the charity Hourglass in 2020 revealed that one in five UK residents had personal experience of abuse as an older person or knew an older person who had been abused. Hourglass calculated this to mean that almost 2.7 million older people had been affected by elder abuse across the UK in 2020. Data for financial abuse from Age Concern suggests that 1 to 2 per cent of the UK’s over-65 population, equivalent to around 130,000 individuals, have been victim. The Crime Survey for England and Wales in 2018 showed that an older person becomes a victim of fraud every 40 seconds.
As our population ages further, these numbers will only increase.
What in your view should be the role of private
bankers/advisors and others in the wealth space in anticipating
if there is a problem, family conflicts and bad behaviour, etc?
What are the limits on what professionals in the sector can do?
Do they, for example, need to be trained in any specific way to
spot "red flags" and call in outside help?
Banks and financial advisors have an important role to play in identifying and preventing financial abuse of the elderly. After all they hold the relevant financial records and, in the case of advisors, they often have a longstanding relationship with the older person in question. While training on the topic is to be welcomed it should not be considered an essential precursor to action. Often the issue will be obvious. The major red flag for financial abuse of the elderly is change. Older people tend to have consistent income and predictable spending habits and will normally deal with the same individuals when it comes to addressing their finances. Any sudden or major changes to these things should raise alarm bells.
If suspicion is aroused, professionals will need to tread carefully and always within the limits of their own professional obligations, including client confidentiality. If possible, try to speak with the client directly but sensitively about their true wishes and intentions in respect of unusual transactions. If necessary, consider putting a stop on financial transactions by reference to your own safeguarding measures and be cautious about trusting family members or other personal contacts who have recently come on the scene. If necessary, refer the matter to the police and/or the local authority.
Why is this issue so important, in your
The over-50s in the UK control 70 per cent of nation’s wealth and the potential misappropriation or depletion of those assets through abuse has financial implications for the institutions holding them in terms of losses and liabilities. Further, those active in the wealth management industry have a duty to act in the best interests of their clients which must include safeguarding elderly clients from abuse. There is also the question of ethical standards and professionalism – as an industry wealth management will benefit from being proactive about financial abuse of the elderly – clients are much more likely to entrust their financial affairs to institutions that demonstrate a commitment to protecting their wellbeing and interests.