Financial elder abuse
Financial elder abuse relates to situations where an older person experiences harm, distress or financial loss occurring within any relationship where there is an expectation of trust. It can also be the result of intentional or unintentional neglect.
There is no doubt that financial elder abuse is devastating and harmful to the victims, their family members and friends. It can take many forms. Often one form of financial elder abuse can be an indicator of additional mistreatment.
Financial planners are in a unique position to be able to identify financial vulnerability and should be prepared to offer vulnerable clients a good outcome.
Helping FPA members combat financial elder abuse
The FPA is supporting members on this issue. We have been working with the Financial Planning Standards Board (FPSB) to develop new guidance that aims to help financial planners who may work with, or who are likely to work with, vulnerable clients.
The FPA also participated in a working group to develop the Financial Services Council’s (FSC) guide to the prevention of financial elder abuse.
The FPA also provides accredited CPD programs on the topic which are available via My CPD. These include:
Policy – FPA’s contribution to addressing financial elder abuse
The FPA has been actively involved in advocacy and the identification of policy settings to address and prevent financial elder abuse, starting with our contributions to the Australian law Reform Commission’s 2016 inquiry, ‘Protecting the Rights of Older Australians from Abuse’.
As a member of an industry elder abuse working group, the FPA supports initiatives proposed by the Australian Bankers Association (ABA) and Financial Services Council (FSC) to address elder abuse, including:
- the establishment of a national online register of enduring documents
- Consistent Power of Attorney laws across the country which protect people from this kind of abuse
- A register to report suspected elder abuse
FPA submissions
Research – FPEC research grants on elder abuse
The Financial Planning Education Council (FPEC) awarded two research grants to universities in 2019 to support research into this area. Both teams were awarded $5,000 to fund their programs which begin in 2020. The research grants were supported by NAB.
Queensland University of Technology (QUT)
Overview
Research team: Associate Professor Tina Cockburn TEP, Dr Kelly Purser TEP and Dr Sherrena Buckby
Project title: The role of financial planners in preventing, recognising and responding to elder financial abuse
Australian society is ageing, with older Australians holding significant wealth. This creates societal challenges, including increasing risk of elder financial abuse. Financial abuse is ‘the illegal or improper exploitation or use of funds or resources of the older person’ (WHO, 2002). It can include any aspect of a person’s financial affairs, for example: mishandling money and/or assets; executing loan documents with the older person as guarantor; stealing; and coercing/forcing an older person to revoke and/or amend enduring and/or testamentary documents (ALRC, 2017). It is commonly perpetrated by family members and carers (ALRC, 2017), and remains relatively hidden (Lacey, 2014). As trusted advisers, financial planners are uniquely placed to prevent, recognise and respond to elder financial abuse (Corbin, 2017; Hayne 2019). To support financial planners to discharge legal and professional obligations and rebuild trust, effective education and training programs are needed (Tachino, 2017). This project will contribute to financial advisors’ awareness and understanding of elder financial abuse, including identification of risk factors; ethical and professional obligations to safeguard against elder financial abuse; interventions and prevention strategies; relevant laws; and responses to elder abuse. Outcomes will include: a literature review, conference presentation, report, fact sheet for financial planners and further research/training recommendations.
Griffith University
Overview
Research team: Dr Tracey West, Mr Richard Olley, Dr Tom Verhelst
Project title: Quantifying the dynamics of elder abuse
While data on elder abuse is lacking, a report by AIFS (2015) suggests that between 2% and 14% of older Australians are likely to experience elder abuse in any given year. Elder abuse describes a broad range of abuse, however, the most common type experienced by elderly people is financial abuse (WHO, 2015). Higher relative wealth, physical and mental health problems are contributing to the increased risk of elder financial abuse (Kemp & Mosqueda, 2005). The impact of elder financial abuse is a significant issue as elderly victims suffer a greater impact of financial losses as they have neither the time nor the capacity to recover from the economic loss and may not be able to support living expenses (Darzins, Lowndes, Wainer, Owada, & Mihaljcic, 2010). Accordingly, this project aims to quantify the dynamics of elder abuse. Utilising complaints data reported to the Aged & Disability Advocacy Australia (ADAA) Queensland network, we thematically classify complaints relating to elder financial abuse and quantify the range of factors associated with it. For financial advisers and other professionals, the reported abuse of financial and legal instruments such as powers of attorney, access to accounts and wills, will help formulate protection strategies for clients.