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Financial exploitation remains one of the fastest-growing risks facing older adults, and financial advisors are often the first to notice when something isn’t right. By staying alert and taking action early, advisors can play a meaningful role in safeguarding their clients’ financial well-being.
What is financial exploitation?
Financial exploitation is a growing form of abuse that targets adults age 60 and older. It occurs when someone misuses, mishandles, or takes unauthorized control of another person’s money, property, or assets—often without consent, under false pretenses, or through manipulation.
Examples include:
- Cashing checks without authorization
- Forging signatures on financial documents
- Borrowing money from an older adult and failing to repay
Be the first line of defense. Recognize these key warning signs:
Mild warning signs
Continue baseline monitoring
At this stage, stay observant and maintain regular communication with the client. Look for subtle shifts in behavior or financial activity that may indicate emerging concerns:
- Mild cognitive changes, such as repeating questions, losing track of dates, or occasional confusion during conversations.
- Early signs of diminished self-care or awareness, where the client seems less attentive to personal hygiene or uncertain about routine financial matters.
- Small but unusual transaction patterns, including ATM withdrawals or check activity that don’t align with the client’s typical habits.
- Exposure to questionable offers, such as new online relationships or investment pitches that sound “guaranteed” or “risk-free.”
- Curiosity about unconventional transactions, including questions about converting assets to cash, gold, or cryptocurrency.
Concerning warning signs
Increase monitoring
Be alert to behaviors or patterns that may indicate a client is at risk of financial exploitation:
- Cognitive changes, such as repeating questions, confusion about time or place, or forgetting prior conversations or long-held facts.
- Decline in self-care or awareness, where the client appears disoriented or struggles to manage basic financial matters.
- Unusual transaction activity, including frequent or large ATM withdrawals, or check activity that doesn’t align with the client’s typical behavior.
- Questionable solicitations, such as romance or investment pitches that promise guaranteed or “risk-free” returns.
- Requests involving cash, gold, or cryptocurrency, including situations where a stranger plans to collect funds or suggests transferring money to a “safe wallet.”
Take immediate action
Place account on hold if permitted
Advisors should act quickly if they observe any of the following red flags:
- Unusual financial activity, such as large or frequent cash withdrawals, wire transfers, cryptocurrency transactions, or cashier’s checks sent to new or overseas recipients.
- Client confusion or distress, including statements like “the government,” “my bank,” or “tech support” told them to move money.
- Third-party involvement, where a caregiver, new acquaintance, or relative speaks on the client’s behalf, applies pressure, or requests access or beneficiary changes.
- Sudden or unexplained account or estate changes, such as updates to wills, powers of attorney, or beneficiaries—or attempts to add joint owners without a clear reason.
Your role matters
Every interaction matters—for your clients and your reputation. Learn to recognize the warning signs of financial exploitation and take the right actions.
