CPA financial planners are noticing scams perpetrated against their elderly clients, according to a new survey by the American Institute of CPAs.
When asked what types of financial abuse or fraud they’ve seen with elderly clients, CPA financial planners cited phone or internet scams most frequently, at 75 percent, followed by the inability to say no to relatives (60 percent) and identity theft (49 percent). Other common scams or abuse they’ve noticed include support for non-disabled adult children (43 percent), credit card theft (30 percent) and being taken advantage of by an in-home caregiver (26 percent).
On the positive side, CPAs are seeing fewer clients victimized by many common scams this year compared to 2015. Falling victim to fraud is more likely to have a substantial emotional impact (68 percent) on the elderly than a substantial financial impact (32 percent).
Still, there are worrying signs as the baby boomer population ages. In the past year nearly half of the CPA financial planners polled said they had a client show signs of dementia for the first time.
“Everyone is vulnerable to financial abuse and exploitation,” said Susan Tillery, who chairs the AICPA’s PFP Executive Committee, in a statement Wednesday. “However, the elderly are highly susceptible because companionship is an enticing allure for them. This can be due to the disintegration of the traditional nuclear family, death of spouse or friends, and the isolation that accompanies declining health. Financial exploitation of the elderly impacts much more than their finances. When someone they depend on for companionship abuses that trust, they can be emotionally distraught and withdraw from family and friends. One of the challenges specific to working with the elderly that CPA financial planners encounter is assessing their elderly client's desire to provide financial help for a family member, against their own continuing financial needs.”
A 92 percent majority of CPA financial planners said they have dealt with diminished capacity in their clients by ensuring powers of attorney and health care proxies are in place. Two-thirds (66 percent) of the survey respondents said they arranged to contact their client’s other professionals and relatives. Other measures they said they have taken include getting authorization to contact their client’s attorney (44 percent), moving money to a trust (37 percent), and automating their client’s annual required minimum distributions from their qualified retirement accounts (34 percent). Nearly a quarter (23 percent) of the CPA financial planners polled had their clients move into a previously selected assisted care facility.
