Aging Clientele

The representative must pay special attention to changes in an elder client’s situation, which often arise more quickly than they do with other clients. Therefore, an elder client’s file should be updated more frequently, and the representative should confirm the suitability of his investments as a result of these changes. An elder client’s needs may change suddenly (shorter investment time horizon, lower risk tolerance, protection of capital, easy access to his funds, lack of penalty, etc.). The representative should opt for phone communications with an elder client when updates are needed to his profile, unless the client has clearly indicated his preference for e-mail or another form of communication.

In the event that an elder client’s health appears to be declining, the representative does not need to evaluate his cognitive or intellectual abilities if he has concerns about his ability to make decisions for himself. However, he must note in the client’s file the facts that he is aware of which could point to incompetence, such as the client’s questions and answers when there is an inconsistency.

The representative has a certain responsibility when it comes to his client’s financial education.

It appears as though a person’s financial literacy tends to decrease as he gets older, unlike his confidence in financial decisions, which remains stable. Elder people tend, therefore, to make decisions with confidence, without realizing that they may not have enough knowledge to make the right decisions. This also increases the importance of having access to advice from a representative.

The representative must be especially careful in the way he provides information to an elder client. As with all his other clients, this information must be adapted to the client’s knowledge and financial literacy, but it must be clearer, more concise and more structured. Documentation in paper format may be provided to an elder client once the representative has reviewed his content with him. Providing additional information and confirming an elder client’s understanding takes more time than simply giving him documents, but the client will appreciate the time that the representative dedicates to ensure his understanding, and he will feel better looked after.

A representative cannot recommend a strategy or product that the client doesn’t understand. Therefore, he must confirm the client’s understanding of the strategy or product in question. The representative shouldn’t be afraid of treating an elder client like a child. Lack of understanding regarding the products offered could cause this client to make a decision without the assurance that the products are suitable for him and correctly correspond to what he wants. An elder client must understand the risks associated with products, including the possibility of additional fees or financial losses.

See the section Products for more information.

Best Practices

• Suggesting to an elder client that a member of his family or a trusted person come to meetings with the representative and discussions, if this seems necessary for his understanding of financial concepts.
• Ensuring that an elder client doesn’t have hearing problems, that he understands him, that he is fully able to listen to him, and that he is comfortable with his communication style.
• Taking an elder or vulnerable client’s specific needs into account. For example, scheduling morning appointments if they’re preferable for the client.
• Using an effective communication technique, such as using metaphors, concrete examples, and a structure to facilitate transmission of information and memorization.
• Paying attention to non-verbal cues to detect an elder client’s incomprehension. This helps the representative know if he needs to explain concepts again or in another way for them to be fully understood. The representative can, for example, verify an elder client’s understanding by asking him to summarize the information, giving the client an opportunity to express himself.
• Sending a letter to an elder client, either by mail or e-mail depending on his preference, reporting on what was discussed in a meeting.
• Documenting an elder client’s file to record the content of discussions, such as questions asked and answers provided. This will allow the representative to more easily demonstrate his adherence to his obligations, even many years down the line, as well as his goodwill toward his client. Within the context of an aging population, this documentation makes complete sense.

The client’s interest must remain the critical criteria behind every decision made in his regard, even if he is incompetent. Each request by a mandatary must also be addressed with the client’s interest in mind.

The representative should not presume what the client wants. He must ask him, or ask his mandatary if necessary, before taking any action on his behalf.

What to do when the client requests a transaction that doesn’t seem to be in his best interest

• Open a discussion with the goal of encouraging the client to reveal his reasons for making the transaction
• Understand the client’s reasons
• Explain to the client the effects of the transaction on his financial security and his goals, especially tax consequences
• Try to steer the client toward a product that suits his profile
• Suggest time to think it over
• Suggest including a trusted friend or family member in the next meeting
• If the client persists with his request, speak with the conformity department at the firm or brokerage where the representative works; provide sufficient warnings and re-balance the portfolio if necessary
• Document conversations and warnings
• Update your understanding of the client, if necessary

The representative must aim to maintain the confidentiality of his client’s information. If he has reason to believe that the client is the victim of abuse or shows signs of incompetence, he cannot communicate this information to one of the client’s loved ones or any other person without first obtaining the client’s consent. If he does so without the client’s consent, even with the best intentions, he would be committing an ethical violation. As a result, he could be subject to disciplinary measures, even if the client hasn’t experienced any damage, and even if the representative acted with no intention of harming him.

This shows how important it is for the representative to obtain the client’s authorization during their first meeting to communicate with a trusted person identified by the client for any matters regarding his personal or financial affairs. A client will notice the attention that the representative dedicates to protecting his personal information and interests, and will feel reassured and more open to disclosing his personal and financial information.

If the situation is urgent and may threaten an elder client’s or third party’s life, health, or safety, and the representative is not able to act or communicate with the trusted person identified by the client, he can contact one of the many organizations dedicated to elder people’s well-being (such as the Commission des droits de la personne et des droits de la jeunesse, the Elder Mistreatment Helpline, or the Curateur public, or he can advise his client to do so.

See the section Protecting personal information for more details.

An elder person is not necessarily vulnerable. In the usual meaning of the word, a vulnerable person can easily be affected, cannot defend himself, or is fragile.

A vulnerable person is an ideal target for all kinds of financial abusers. Material or financial abuse may have significant physical, psychological, and financial consequences for its victims and their loved ones.

The representative must be able to detect a situation of vulnerability or abuse with an elder client, including potential intimidation or influence of a person on the client’s behaviour. He must be ready to react appropriately while respecting the client’s dignity, personal pace, wants, independence, culture, and the confidentiality of his file and his state of health.

Abuse victims don’t always admit they are experiencing abuse, whether it’s due to embarrassment, shame, guiltiness, resignation, normalization, fear of losing independence, or fear of the repercussions of an accusation, or to, despite everything, preserve their relationship with their abuser.

A client who feels safe and feels he can prevent the situation from becoming worse will be more likely to divulge information about the abuse he is experiencing. The representative could tell him the advantages of speaking about the situation and help him understand the possibility that the abuser will change his behaviour if he gets help.

Examples of Material and Financial Abuse

Certain facts can indicate that material or financial abuse is taking place with an elder client. The representative can take note of the following:

• Requests for unusual transactions or cancellation of transactions without a valid reason
• Unusual money transfers involving the client’s account
• Cheques cashed or bank withdrawals made by an authorized person (such as a mandatary) for his personal needs
• Suspicious signatures on important documents
• Changes by an unauthorized person, including a loved one, in the client’s important documents, such as a will or a contract for a loan, a purchase, or a sale
• People becoming interested in the client’s finances without a valid reason
• Emotional blackmail of a loved one to obtain money from the client
• Threats or pressure to obtain money, benefits, or assets, or to grant loans to a third party
• Forced sale of assets or liquidation of certain investments
• Use of the client’s assets without fair compensation
• Client’s limited access to information about the management of his assets

The fact that an elder client lives alone, is in a dependent situation, or has a large estate is not generally sufficient evidence to suggest that he may be threatened or influenced. However, depending on the circumstances, these facts may constitute additional risk factors.

The competence of elder people can change quickly. The representative must remain particularly aware of any change in an elder client’s situation to ensure that he is always able to make decisions for himself and that his needs are the same.

WHAT TO DO WHEN DETECTING IMPAIRMENT OF A CLIENT’S INTELLECTUAL FUNCTIONS (MEMORY LOSS, CONFUSION, UNCERTAINTIES, INCOMPREHENSION OF CONCEPTS NORMALLY UNDERSTOOD)

Request for unreasonable transaction

If the client’s transaction request does not seem reasonable in regards to his situation, but the representative is not sure he is witnessing abuse or incompetence, he must take the necessary precautions.

If there is no power of attorney, protection mandate, or written consent from the client to communicate with a loved one, the representative:

• may schedule another meeting to put things into perspective, such as declaring the necessity to determine from which funds it would be preferable to make withdrawals to minimize redemption fees and the tax impact, or the need to evaluate the return of the funds, or the impact of a withdrawal on the guaranteed income supplement
• may encourage his client to get help from a trusted disinterested person that he has identified who could assist him with his personal financial affairs
• may suggest to the client to invite this person to a meeting with him and the director or compliance manager at the firm or brokerage where he works
• must notify his firm or brokerage’s compliance department, if applicable, and verify whether measures are in place to appropriately react to the situation
• must note in the client’s file the facts he observed that made him suspect incompetence or vulnerability
• may verify with the Curateur public whether his client was put under trusteeship, put under curatorship, or declared incompetent

Reasonable transaction request

As long as the client has not been declared incompetent, the representative must carry out all transactions he requests unless they are unreasonable based on his situation.

Notes in the client’s file are especially important in this case. The representative must also follow up more frequently with this client to verify his ability to make decisions.

Helpful Documents

It is in the representative’s best interest to advise his client to prepare for potential incompetence. He may suggest that he establish a protection mandate and a power of attorney upon their first meeting.

The protection mandate allows someone to designate one or more people in advance to oversee their well-being and manage their assets in the event that he becomes unable to do so himself.

As for power of attorney, it allows someone to designate one or more people to act for him and on his behalf while he is still able to do so.

Power of attorney ceases to be valid in particular when the person who gave the mandate (the mandator) revokes it, or when the court deems this person incompetent. Once the protection mandate is approved, the mandate is valid and the designated person acts for and on behalf of the incompetent person.

Both documents must be used with extreme caution and specify the rights and responsibilities of the mandatary.

Best Practices

• To avoid finding himself in a situation where he could be held to blame for his actions, it is in the representative’s best interest to anticipate things and act in advance before an elder client becomes incompetent.
• The representative must take the time to explain to the client the benefit of preventing these situations by addressing his potential incompetence as early as possible in the relationship. He must be vigilant when the client identifies a trusted person, because the immediate family (spouse, child, or other family member) is often found responsible for elder abuse.
• Representatives who want to provide elder clients with personalized and ethically foolproof service will find helpful strategies for their search for solutions in the tool What to do if your client appears vulnerable, created by the CSF.
• Finally, because incompetence may arise at any time, for example following an accident, the best practices outlined above apply for all clients both young and old.