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What To Do With The Impaired Financial Professional?


What To Do With The Impaired Financial Professional?

The financial services industry often talks about succession planning. The assumption is that we’ll all retire one day and we need a graceful way to do it. But one problem is not being addressed: the professional herself with cognitive impairment. Some folks keep working long past their prime. When they do, cognitive impairment can affect their work, endanger their clients and put the entire firm at risk.

Financial professionals are not immune from dementia and don’t get it less than anyone else.

It’s time to look at this as a real risk, not some unlikely possibility that can easily be taken care of by a succession plan for the professional’s business. Dementia is a complicated disease. It sneaks up on people, with the early warning signs of short-term memory loss, followed by increasing difficulty with reasoning and judgment. If we had not witnessed this at with impaired professionals ourselves, we might be fooled into thinking that professionals had figured out how to address it. Simply put, they haven’t.

Let’s look at the notion that all you need is a succession plan for your business and there will be no problem if you develop cognitive impairment yourself, or someone in your organization does. What’s the flaw in this? It is that many people with early Alzheimer’s or other dementia do not recognize that they are impaired. This phenomenon is called anosagnosia, an inability or refusal to recognize a defect or disorder that is clinically evident. Ironically, the part of the brain that reasons and analyzes is so affected by the disease that it is not able to process the information about one’s own impairment.

The odds of developing Alzheimer’s disease are at least one in three by the time we reach age 85. The risk doubles about every 5 years starting at age 65. So some financial professionals are going to develop dementia and some will not know that they have any impairment. They keep working. Others around them are afraid to raise the topic when alarming signs first appear. No protocol exists to ease a person out of the role to which they are accustomed, particularly when they tell you they’re feeling just fine, thank you. And that big book of business beckons. 

Busting The Myths

Myths exist. The first is that a financial professional, whether managing money for clients, selling products or addressing their taxes and accounting, will know that he or she needs to retire when the time comes. But we all know folks who have a good book of business and enjoy what they do even if they are impaired. They will not look to retire by a certain age. They will in fact resist the very idea.

 Another myth is that somehow the doctor, the family or someone else will advise you when you have dementia and you will of course agree with their assessment. Denial is a frequent component of cognitive impairment, rooted deeply in fear of losing control over one’s life. Even those who start to see and fear their own early difficulties with memory will cover it up, avoid facing it and carry on as if everything is fine

What Can Professionals Do?

As described in detail in Succeed With Senior Clients: A Financial Advisor’s Guide to Best Practices, every organization needs a protocol to address the risk of diminished capacity in an impaired colleague. Few firms have a mandatory retirement age, but this controversial option exists. 

A protocol for advisors and others can look similar to the protocol every professional needs for aging clients. Here’s what we suggest, in brief.

  1. Standardize the way you spot the red flags of diminished capacity.
  2. Document them again in a standard way. Contact with the potentially impaired client must then increase.
  3. Use a uniform way to escalate the issue to knowledgeable others in the firm.
  4. Have legal documents in your organization which allow you to contact an appointed third party to become a surrogate decision maker.

For professionals, use the same method. Track those red flags. The impaired professional must be approached. A mandatory way to ease the person out of the job on a specific timeline should be in place, and this should become office policy.

To protect yourself, your firm and your senior colleagues from embarrassment of potentially dangerous errors, take these steps now to create a standard office procedure for anticipating the risks of impaired professionals.

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