Understanding Family Dynamics Can Protect You From Legal Liability, Annuitize Your Business, And Make You The Family Hero Hot

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There are few state, federal, or industry guidelines to help advisors learn to recognize the symptoms.
Not only do advisors have to consider the direct implications, they also have to consider how the dynamics of the family will affect their ethical and legal liability when working with clients who have dementia.
That it crosses into the realm of fiduciary responsibility is something that should be recognized throughout the industry beyond the scope of dealing with cognitive impairment.
The growing problem of cognitive decline is a tipoff to prepare for other situations where you’ll need to be involved with the entire family instead of just the individual client.
Getting powers of attorney and other legal documents in place early are processes where the entire family’s needs should be considered with great care.
Building relationships with heirs and younger generations not only will help you keep them in your book after elder family member passes away, it will provide a window into the family’s dynamics and prepare all of you to work together as issues such as dementia enter the client-advisor relationship.
If you’re not comfortable navigating these aspects of wealth management on your own, you can partner with an external professional who specializes in this area.
Either way, the concept of fiduciary duty comes to the fore in helping you avoid legal liability and ethical breaches.
How so? Because you will have laid the groundwork with the entire family—including your original client—about how they wish to proceed when the realities of growing older set in.
This reduces your legal liability because it will be easier to manage the relationships around the changed circumstances.
It also will annuitize your business and cement your relationship with your original client because he or she knows you will be taking care of both him and his family members during a trying and emotional time.
Besides all of that, it’s just a far superior way to serve your clients. Why wait until they can’t remember your name?


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