Advisors without a proper understanding of how to best work with an aging clientele, particularly those with diminishing capacity, pose a higher compliance risk to dealerships than seniors themselves, according to Paige Wadden, head of compliance at Worldsource Wealth Management.
Speaking as part of a panel at the 2013 Univeris Summit in Toronto on Wednesday, Wadden said, “It’s not the seniors in and of themselves that are causing the concern.”
“I’m more concerned with our advisors and the people who have influence on seniors because [seniors] are a more vulnerable segment of the population,” she said.
Advisors who are not properly aware of how to spot and handle instances of diminishing mental capacity in an elderly client pose a strong compliance risk to dealers, she said.
As such, dealers need to put more of a focus on training their advisors on how to work with seniors, she said, in terms of issues around capacity, powers of attorney and having an overall better understanding of the situations of elderly clients.
Furthermore, advisors themselves need to treat know-your-client requirements as more than just paperwork to be filled out automatically, said Wadden, as it is the KYC process that will truly help advisors understand their senior clients and avoid compliance risks for both themselves and their dealers.
“If you really know your client and are not just getting them to fill out the form, which becomes rote after awhile,” she said, “then you’re going to know that there is something that’s going on with that client.”