Financial abuse of the elderly is becoming a tragic trend.
The business model of the brokerage industry has been under pressure since the wide adoption of the Internet – before the World Wide Web, the brokers were the only ones with information like price earnings levels and stock quotes. The resulting stress on profit levels appears to have resulted in one of the more tragic trends in the finance industry – the financial abuse of the elderly.
A recently released column by Charles Schwab quoted a 2014 study which found that more than a third of U.S. seniors, 37 per cent, had been victims of fraud or financial exploitation. A separate study in 2016 estimated the average loss in these cases at US$36,000.
The New York Times detailed a horrifying specific case this week where a woman moving her mother, who was suffering from Alzheimer ’s disease, to an assisted care facility found that her mother’s $1.3-million brokerage account had been charged fees of $128,000 in the previous 12 months.
People lacking ethics will do virtually anything to protect their livelihoods and this is particularly true for professionals like brokers who became accustomed to seven figure annual income in previous eras. The increasing number of financially successful Boomers in retirement, unfortunately, is providing more easy targets for the desperately unscrupulous.
The Schwab column provides a number of useful tips to combat the financial abuse of seniors. It wouldn’t be the case in a perfect world, but younger generations should use these tips and take responsibility to advise and protect their elderly relatives.
-- Scott Barlow, Globe and Mail market strategist
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Compiled by Gillian Livingston and Darcy Keith