During online check-in for a recent flight abroad, I was asked to provide emergency contact information. Apparently all U.S. airlines are required by the U.S. Department of Transportation to obtain contact information from American citizens traveling internationally.

Last year I attended a Wharton Pension Research Council conference, Financial Decision Making and Retirement Security in an Aging World in Philadelphia. The conference was thought provoking and informative. A number of the speakers stressed the need for investors to provide their financial institutions and advisors with “emergency contacts” to keep on file.

Within a few months, both of these events made me think about my security and the importance of designating someone to act on my behalf, if I’m ever not able to do so myself. This really resonated with me.¹

By 2050, as the baby boomers continue to retire, the population of adults ages 65 and older is projected to double.² In the United States today, 1 in 9 people older than age 65 and about 1 in 3 older than age 85 has Alzheimer’s disease or another form of dementia.³ My paternal grandmother died from Alzheimer’s in her early 70s. Lucille was 1 of 4 siblings who each passed away rather quickly from Alzheimer’s in their early 70s. So we do worry about this disease in my family.

Incidence of mild cognitive impairment and dementia by age

Source: Center for Retirement Research at Boston College.

My colleague, Shannon Nutter-Wiersbitzky, Vanguard’s head of Participant Strategy and Development, spoke at a conference last fall about her grandfather’s battle with Alzheimer’s. “I’m acutely aware of the emotional and financial toll that Alzheimer’s can take on a family,” she explained to a group of plan sponsors.

“In my grandfather’s case, we noticed he was making unusual donations to charity. What we discovered was that he was saying ‘yes’ to phone solicitors when he’d lost the ability to understand what he was agreeing to do.”

Shannon and I think about Alzheimer’s a lot, both personally and professionally. And, we aren’t alone. In October 2016, the Financial Industry Regulatory Authority (FINRA) submitted to the Securities and Exchange Commission (SEC) proposed rules to address the financial exploitation of seniors and other potentially incapacitated adults. FINRA proposed amendments that would require firms to make a reasonable effort to obtain the name of and contact information for a trusted contact person for a customer’s account. Approved by the SEC on February 3, 2017, the rules will also allow firms safe harbor when placing temporary holds on disbursement of funds when there is sound suspicion of financial exploitation of these specified clients.

The idea of an emergency contact for financial institutions and advisors works like this. Early in retirement, when the client still has good cognitive skills, an emergency contact is established. Sometimes it is the financial institution or advisor who first notices cognitive decline or the onset of dementia, at which time the client could be more susceptible to financial fraud. When the client is experiencing the onset of dementia, they may feel threatened when their advisor raises the prospect of needing assistance with their finances. This is also a time of high anxiety for these individuals. Hence the need to plan for the risk well in advance.

I am required to designate an emergency contact when I travel outside of the United States. Perhaps I should also be required to designate an emergency contact for my financial affairs. It’s always comforting to be prepared, just in case of an emergency.

¹See Deevy, Martha and Marti DeLiema, Aging and Exploitation: How Should the Financial Service Industry Respond?, Stamford University Center on Longevity, 2016.

²See He, Wan, Daniel Goodkind, and Paul Kowal, An Aging World: 2015, United States Census Bureau, 2016.

³2016 Alzheimer’s Disease Facts and Figures, Alzheimer’s Association, 2016.


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