SMSF practitioners need to arm themselves with education around the specifics of elder abuse as the recent changes to super may mean clients are holding more money outside of their fund, making them prime targets.
At an SMSF Association local community event in Sydney today, Protecting Seniors Wealth chief executive Anne McGowan said seniors hold about 70 per cent of the wealth in the country.
“SMSFs and trustees are also at risk of financial senior abuse – the new laws around the superannuation balance could increase this risk as they’re likely to have more money sitting outside of the superannuation environment,” McGowan warned.
“Your senior clients have rights, so awareness and taking action is key as a professional but also having a plan in place so you know what to do in these circumstances.
“Knowing about how to help them protect their wealth, including their dignity and way of life, in an informed and proper way could prevent abuse.”
She said it was important for financial planners to undergo proper training to communicate the risks of elder abuse to clients.
“Build rapport and trust with your clients, provide information about financial abuse and asking open-ended questions may allow them to feel they can confide in you,” she noted.
“Having a full understanding of such abuse in detail can also help you avoid becoming inadvertently complicit.”
The Council of Attorney-Generals is due to develop a national plan to address elder abuse by the end of 2018.
This move comes in response to a key recommendation of the Australian Law Reform Commission’s (ALRC) report, “Elder Abuse – A National Legal Response”.
Last month, SMSF Association chief executive John Maroney said the issue was a prime concern for the SMSF industry, with 47 per cent of SMSF members aged 60 or older.
“Elder abuse is an emerging risk for the SMSF sector and the ALRC’s recommendations regarding super and the issue of enduring powers of attorney can help mitigate it without significantly increasing compliance for SMSF trustees or limiting choice on how to run their fund,” Maroney said at the time.
McGowan said outdated research indicates one in 20 senior or elder people are financially abused.
“They were the figures from 10 years ago, but from feedback it’s now possibly one in 10 or higher,” she said.
“And over 60 per cent of abuse is financial abuse.
“It’s a huge concern for those with diminishing capacity, but seniors with capacity are also financially abused.
“‘Inheritance impatience’ is often a factor.”