A survey highlights a problem likely to become more acute as populations in countries such as the US age - financial fraud. And advisors need to be on their guard to protect clients' best interests.

More than half (61 per cent) of financial advisors in the US have seen or suspected that an elderly client has been abused over money at least once, according to a survey of 591 advisors by InvestmentNews. Alarmingly, of those who suspected abuse, 56 per cent did not report it, the publication said.

The issue is particularly serious because as populations age, and the Baby Boom generation retires and transfers wealth, a significant chunk of the population in developed nations such as the US is vulnerable to fraudsters. Another issue is ensuring advisors are alert to issues around cognitive health. In 2015, for example, research by Fidelity showed that three-quarters of financial advisors worked with clients with diminished mental capacity, while one in five advisors has encountered financial abuse among their aging clients. (For more on this, see this Family Wealth Report article.)

Cerulli Associates has also revealed (2015) that aging client bases will create challenges for advisors, as 57 per cent of their clients are above the age of 60 (while the summary did not specifically cite cognitive impairment, it is fair to anticipate that this would likely be among the list of related issues.)

While the IN story was about the elderly US population in general (there are an estimated 45 elderly citizens), the relevance to those serving high net worth individuals is obvious.

The publication cited a study by the state of New York saying that about five million older Americans across the country are financially exploited each year.

(Editor's note: The issue of protecting the best interests of elderly citizens and their finances is one of those subjects that this industry needs to be more aware of. To be fair, in some ways the DoL's Fiduciary Rule helps this process, but the wealth management sector must be even more alive to the dangers. In Europe, for example, Swiss bank Julius Baer has initiated a training programme for client-facing staff so they can be alert to issues such as cognitive decline. The ageing of populations in the West also raise questions about whether there are sufficiently well trained advisors coming into the labor market to work with clients in this area.)