DE­MEN­TIA AND YOUR FI­NANCES

Weekend Argus (Saturday Edition) - - PERSONALFINANCE -

De­men­tia has dev­as­tat­ing con­se­quences for phys­i­cal health; but it can also rav­age your fi­nan­cial well­be­ing.

Lara War­bur­ton, man­ag­ing di­rec­tor of Imara As­set Man­age­ment South Africa, says the chal­lenges of de­men­tia have prompted some lead­ing fi­nan­cial plan­ners to take spe­cial mea­sures to as­sist age­ing clients who are be­com­ing for­get­ful, waste­ful and disori­ented.

The in­ten­tion is to en­sure that dis­ori­en­ta­tion in fi­nan­cial man­age­ment does not creep in.

She says pru­dent older clients of­ten take the ini­tia­tive and raise the is­sue of what to do in case Alzheimer’s or other forms of de­men­tia set in.

Imara As­set Man­age­ment has in­tro­duced a sys­tem of “red flags” that are raised when an older client di­verts rad­i­cally from an agreed fi­nan­cial strat­egy or long-es­tab­lished prac­tice. When this hap­pens, the fi­nan­cial plan­ners are em­pow­ered to

get in touch with a client’s chil­dren, grand­chil­dren or trusted friends.

War­bur­ton says this proves the worth of a long-stand­ing re­la­tion­ship with a trusted, highly ex­pe­ri­enced fi­nan­cial ad­viser, be­cause such a re­la­tion­ship has has many un­quan­tifi­able ben­e­fits.

“If a client sud­denly be­comes ex­trav­a­gant or reck­less in fi­nan­cial mat­ters, this is a strong in­di­ca­tor some­thing is wrong. Some­times we sim­ply re­quest a re­view and a re-brief­ing on strat­egy. A sim­ple face-to-face ses­sion usu­ally re­solves the is­sue, but in other cases it is nec­es­sary to alert fam­ily mem­bers.”

War­bur­ton says that re­cently a long-re­tired client sud­denly needed much more ready cash month af­ter month. En­quiries re­vealed he had started buy­ing the same high-ticket item over and over again.

She says the im­pli­ca­tions of in­creas­ing longevity de­serve care­ful con­sid­er­a­tion in many fields, in­clud­ing fi­nan­cial plan­ning.

There is grow­ing recog­ni­tion that de­men­tia-re­lated dis­eases will af­flict more and more peo­ple as the pop­u­la­tion starts to age.

War­bur­ton says many clients are tak­ing a prac­ti­cal, mat­ter-of­fact ap­proach.

She says a holis­tic ap­proach is re­quired, which cov­ers things such as in­vest­ment man­age­ment, es­tate plan­ning, dis­cus­sions around “liv­ing wills” and in­struc­tions to fam­ily mem­bers on what to do should you be­come to­tally in­ca­pac­i­tated.

“Once sce­nario-plan­ning like this is un­der way, many clients raise the is­sue of de­men­tia or Alzheimer’s,” War­bur­ton says. She says a client in his mid-60s re­cently told her he had spent 35 years build­ing a nest-egg and if he started “los­ing it” he didn’t want to lose his money as well.

Pru­dent peo­ple should have a trusted fam­ily doc­tor, a trusted fam­ily lawyer and a trusted fi­nan­cial ad­viser, War­bur­ton says.

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