Aging and Incapacity

It’s not a question of IF you will have to work with a client with diminished capacity, but WHEN

It’s not a question of IF you will have to work with a client with diminished capacity, but WHEN

Are you prepared?

For the first time in history, seniors make up a bigger share of Canada’s population than children. Our aging population and increased life expectancy will bring a lot of opportunities but also challenges for financial advisors. With aging comes health related challenges and the increased likelihood of a cognitive impairment such as Dementia. As an advisor, this can have a significant impact on your business practice.

  • 1 out of 4 Canadians aged 85 or older will have dementia1
  • Financial advisors have an average of 7 cognitively impaired Clients in their book of business2
  • Nearly two-thirds of advisors have encountered a Client with diminished mental capacity and/or dementia3

Advisors must be prepared to accommodate the unique needs of this growing Client segment and help Clients age with dignity.

1 Statistics Canada 2012
2 Succeed with senior clients: A financial advisor’s guide to best practices. Book by Carolyn Rosenblatt and Mikol Davis (2016)
3 Mental Health & The Financial Advice Relationship, Bridgehouse Asset Managers, 2018.

We don’t know when or how incapacity will strike. People should be prepared and ensure their affairs are in order while they are fully mentally capable. Addressing diminished capacity and potential for financial exploitation helps protect Clients, yourself, and your business.

Use Helping you plan to age with dignity checklist to help Clients prepare for future health-care needs.

Step 1: Recognize the red flags of cognitive decline and financial exploitation

Having capacity means that a person can both understand the necessary information for making decisions and appreciate the consequences of those decisions.1 As Clients age, the threat of financial exploitation and/or cognitive decline grows exponentially. It’s imperative to be aware of the warning signs related to diminished capacity. Warning signs include:

  • Pronounced memory loss
  • Difficulty performing familiar tasks
  • Changes or inconsistent mood and behaviour
  • Decreased understanding of financial concepts
  • Impaired financial judgment

Watch these videos to recognize the red flags of cognitive decline

Read Recognize the red flags of cognitive decline and financial exploitation

Step 2: Prepare early on using important documentation

A key part of planning is ensuring that Clients have completed important documents. All Clients should consider:

  • A power of attorney (general and enduring or continuing)
  • A will
  • A living will or medical directive
  • Trust documents, if required for their estate plan.

If Clients don’t have one or more of these documents, you may want to start that conversation. Make a note of what hasn’t been completed yet. Circle back with Clients in a few months to see if they need help with any missing documents.

Consider a TCP

Another key planning step that advisors are using is having Clients designate a trusted contact person (TCP) on their account. Clients can provide consent for you to contact their TCP in defined situations, such as suspicion of incapacity or financial exploitation. In designating a TCP, Clients allow you to speak to a person they’ve authorized without the concern of breaching privacy.

There are currently no regulatory requirements for Clients to have a TCP. However, regulators are encouraging this as a best practice when a Client account is opened or when collecting know-your-Client (KYC) information. Making it a part of your practice is a good way to be proactive with Clients, your firm, and industry standards.

Step 3: Protect Clients, yourself, and your business

What do you do when you discover that a Client has diminished mental capacity? Or someone is taking advantage of them financially? Knowing where to look for help is key when it comes to protecting Clients and yourself from the associated risks.

If you suspect a situation of mental incapacity or financial exploitation, follow the established procedures set out by your firm. These include:

1 Source: Dementia in Canada, Canadian Institute for Health Information, 2018.

We can’t predict – but we can better prepare

Addressing diminished capacity and financial exploitation properly helps protect Clients, yourself and your business.

3 experts reveal their best practices – through their personal stories.

Planning for Client incapacity is worth your time. Watch these 5 short stories to hear industry experts share their best practices for serving an aging Client segment.

  • A Certified Financial Planner talks about assessing capacity and what they did when they suspected a family friend was showing signs of Dementia.
  • An industry expert tells a personal story of caring for a parent with Dementia and what signs he saw.
  • A Certified Financial Planner talks about how advisors can protect senior Clients from financial exploitation.
  • A Certified Financial Planner and an Insurance specialist share their best practices to prepare for Client incapacity and how to build a senior-friendly business.

Each Client situation will be unique. But one goal should be universal – to plan ahead and empower you, your Clients, and their family members to minimize the financial risks related to cognitive decline.

Sue Foley discusses how assessing capacity starts with deeply knowing a Client. She shares a family friend’s struggle with Dementia and the tough conversation she had to have with their spouse.

Wayne Miller shares a personal story about his father’s declining health - what signs of Dementia he saw and why planning ahead is so important.

Sue Foley talks about how advisors can protect their elderly Clients from financial exploitation, signs to look for and what she did when she suspected there was a problem.

Sue Foley and Jennifer Jacobs share their best practices for preparing for incapacity, the important documentation all Clients should have and being an advocate for senior Clients.

Sue Foley and Jennifer Jacobs discuss how to connect with senior Clients and the opportunity this emerging market presents to your business.

Recognize the red flags of cognitive decline and financial exploitation

  • Use this list to learn the red flags of cognitive decline and financial exploitation.
    • For access to this resource, connect with your Sun Life relationship manager.


Contact your Sun Life relationship manager to learn more about this program and the resources available to you.