Question: Since our childhood, our parents have been very secretive about their finances to the point of hiding their checkbooks. Neither ever had a credit card. While Dad worked, Mom kept the three children and family finances straight. Since Mom’s death two years ago, Dad, now 84, has allowed a deacon at his church, who is also a financial advisor, to handle his finances. Dad won’t share anything with me or my two sisters except to tell us that his “financial advisor” calls daily and takes Dad out to eat. None of us has ever been introduced to this man, despite his close personal relationship with our father.

As the closest child in geographical proximity, it has always been the plan that Dad’s care would be my responsibility if he had problems – or so I thought. When he recently began falling and having trouble living alone, he refused to allow me to do anything, calling instead his financial advisor. I tried to talk to Dad’s physician, but I and all of my siblings had been blocked by Dad, who entrusted health decisions to his financial advisor.

I finally got Dad to a lawyer to try to reverse the powers of attorney, but he refused to provide the lawyer with any information about his finances, not even his income, and refused to sign anything. When the lawyer told Dad that he would like to speak with Dad’s advisor, Dad refused and walked out of the office. He later told me that his financial advisor had told him not to tell the lawyer, or for that matter, anyone, anything about what he owned because they would try to take it away from him and put him in a nursing home. He has become more paranoid and secretive about his finances. We have never seen a statement from the financial advisor come to the house in the mail, and he has no other mailing address. Dad always complains that he has no money, so my husband and I are basically supporting him. We have run out of ideas, but are very concerned.

Answer: As you should be! The situation here is a recipe for disaster – that is, if disaster hasn’t already clobbered Dad’s finances because red flags have been waving in the wind: 1) Daily contact with a client by a financial advisor, coupled with dinners out, is most unusual and may well connote undue influence, 2) a financial advisor also being a church deacon smells to high heaven, based on the quasi-fiduciary responsibility; 3) no statements being sent to your Dad is unheard of, and 4) telling your father not to discuss finances with children, lawyers, or anyone else is outrageous since financial issues are closely tied to long-term-care planning. These warning signs, coupled with Dad’s giving his financial advisor the responsibility over life and death decisions, are downright frightening.

While everyone is entitled to privacy in his/her financial dealings, and while we understand your father’s desire to keep these matters private, when elderly people
reach the point that they must depend on others for their care, it is time for them to be open and share information in case the unthinkable – incapacity – occurs.

In our view, financial advisors and others in whom elderly persons place their trust should foster and encourage – not discourage and denigrate -- family relationships under these circumstances.

Taking the NextStep: While Dad may be vulnerable, he does not appear to be incapacitated, and for this reason, you will not be able to be appointed as his conservator or guardian. Therefore, we suggest the following: 1) Try to check out the financial advisor. With whom is he affiliated? Is he a registered investment advisor? Find out if he holds insurance and/or securities licenses and has had complaints lodged against him. Does he have a criminal record? If he is not a Registerd Invesment Advisor he may be a broker and you can check them out at FINRA, the largest non-governmental regulator for all U.S. securities firms. 2) Go to the probate or surrogate court where your mother’s estate was probated and get copies of the estate inventories which should show you what your mother owned when she died -- her life insurance, etc. These records should give you some ideas about what your father started with financially when your mother died. 3) Try to have a have a heart-to-heart talk with your father, and tell him about your concerns. 4) Consider reporting your concerns to your local adult protective services agency, as it appears to us there is a good probability that your father, a vulnerable adult, may have been taken advantage of by an unscrupulous predator.

To get links where you can check on an advisor or broker, go to www.nextsteps.net

online readers; here is link to check Registered Investment Advisors: http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx

and for brokers check FINRA at http://www.finra.org/InvestorInformation/InvestorProtection/ChecktheBackgroundofYourInvestmentProfessional/index.htm

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