Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
How Do Aging and Dementia AffectHow Do Aging and Dementia Affect
Our Capacity to Manage Our Money?Our Capacity to Manage O...
DisclosuresDisclosures
Grant Support:Grant Support:
National Institute on Aging (NIA/NIH) (U.S.)National Institute on Agin...
How do aging and dementia affectHow do aging and dementia affect
our capacity to manage our money?our capacity to manage o...
OutlineOutline
What is Financial Capacity?What is Financial Capacity?
Diminished Financial Capacity in the Elderly: Two Ca...
What is Financial Capacity?What is Financial Capacity?
What is Financial Capacity (FC)?
““the capacity to manage money and financial assets in waysthe capacity to manage money a...
Financial Capacity: Two PerspectivesFinancial Capacity: Two Perspectives
Performance Perspective:Performance Perspective:
...
What is Diminished Financial Capacity (DFC)?
Declining abilitiesDeclining abilities from a prior higher baseline of financ...
Diminished Financial CapacityDiminished Financial Capacity
in the Elderly:in the Elderly:
Cognitive Aging and DementiaCogn...
Normal Cognitive Aging
“…“…the decrease in performance on various measures ofthe decrease in performance on various measur...
Normal Cognitive Aging
Declines normative with aging—not disease basedDeclines normative with aging—not disease based
Mult...
“If the chance of getting a disease is 10 percent, how many people
out of 1,000 would be expected to get the disease?”
Ada...
““To those seniors and especially elderly veterans like myself, I want to tellTo those seniors and especially elderly vete...
Dementias of Aging
Dementias of aging:Dementias of aging:
Alzheimer’s diseaseAlzheimer’s disease
Parkinson’s diseaseParkin...
Normal Brain AD BrainNormal Brain AD Brain
Loss of Brain Tissue in Alzheimer’s Disease
Normal Aging
Mild Cognitive
Impairment
Alzheimer’s
Disease
Cognitive Signs of DementiaCognitive Signs of Dementia
• Short term memory loss
• Language and communication problems
• Co...
Emotional/Behavioral Signs of DementiaEmotional/Behavioral Signs of Dementia
• Poor grooming/hygiene
• Social inappropriat...
Martin et al. (2003). Loss of calculation abilities in mild and moderate AD. Archives of Neurology. 60: 1585-1589.
•Brooke Astor in 1953 (age 51) and as an elderly lady with AD (died in 2007 at age l05).
•Son Anthony Marshall and a lawye...
Prevalence of Alzheimer’s Disease
Diminished Financial CapacityDiminished Financial Capacity
in Older Adults:in Older Adults:
The $18.1 TrillionThe $18.1 Tr...
% U.S. Households Across Age Group% U.S. Households Across Age Group
Adapted from D. Laibson, Age of Reason Lecture, June ...
% U.S. Household% U.S. Household WealthWealth Across Age GroupAcross Age Group
Adapted from D. Laibson, Age of Reason Lect...
All U.S. Households Balance Sheet
[Federal Reserve Flow of Funds—2009]
Total = $53.1 TrillionTotal = $53.1 Trillion
From D...
U.S. Household WealthU.S. Household Wealth
Across Age GroupsAcross Age Groups (in $ Trillion Dollars)(in $ Trillion Dollar...
$18.1 Trillion is at Risk !!$18.1 Trillion is at Risk !!
Why?Why?
Normal cognitive agingNormal cognitive aging
AD and othe...
Early Warning Signs ofEarly Warning Signs of
Financial DeclineFinancial Decline
NEFE Study Methods
Of the overall group (n=138), we comparedOf the overall group (n=138), we compared baseline financial s...
FCI Task Completion Times Over 7 Year Study Period
B: Completion time for using a checkbook/register task
0 1 2 3 4 5 6 7 ...
Neuroscience and Detection ofNeuroscience and Detection of
Financial DeclineFinancial Decline
Journal of the American Geriatrics Society, 58:265–274, 2010
Reduce Angular Gyrus Volume and Financial CapacityReduce Angular Gyrus Volume and Financial Capacity
r = 0.86
R Mid Occipital, Sup Parietal, Angular
Gyrus – 2,386 mm3
R Mid Occipital, Sup Parietal, Angular
Gyrus – 2,386 mm3...
Some day we may be able to use MRISome day we may be able to use MRI
scans to help identify older personsscans to help ide...
Aging/Dementia and theAging/Dementia and the
Senior Financial AdvisorSenior Financial Advisor
Graying of the FA Profession
The “silver tsunami” has not spared the financial services fieldThe “silver tsunami” has not ...
Challenges of the Impaired Senior FA
For Clients:For Clients:
Poor financial services to clientsPoor financial services to...
Aging and dementia are also affectingAging and dementia are also affecting
senior financial advisors’senior financial advi...
Call for Further Research
Scientific research into lossScientific research into loss
of financial skills in aging andof fi...
How do aging and dementia affect our capacity to manage our money?
How do aging and dementia affect our capacity to manage our money?
How do aging and dementia affect our capacity to manage our money?
How do aging and dementia affect our capacity to manage our money?
How do aging and dementia affect our capacity to manage our money?
Upcoming SlideShare
Loading in …5
×

How do aging and dementia affect our capacity to manage our money?

257 views

Published on

The World Economic Forum Global Agenda Council on Ageing Symposium, 3rd February 2016.

"Managing ageing and cognitive impairment: challenges and opportunities for financial services"

Dr Daniel Marson,
Professor of Neurology and Co-Director of the Alzheimer’s Disease Center,
University of Alabama at Birmingham


Published in: Health & Medicine
  • Be the first to comment

  • Be the first to like this

How do aging and dementia affect our capacity to manage our money?

  1. 1. How Do Aging and Dementia AffectHow Do Aging and Dementia Affect Our Capacity to Manage Our Money?Our Capacity to Manage Our Money? Daniel Marson, Ph.D., J.D.Daniel Marson, Ph.D., J.D. Professor of NeurologyProfessor of Neurology Co-Director, Alzheimer’s Disease CenterCo-Director, Alzheimer’s Disease Center University of Alabama at BirminghamUniversity of Alabama at Birmingham dmarson@uab.edudmarson@uab.edu Global Agenda Council on Ageing SymposiumGlobal Agenda Council on Ageing Symposium World Economic Forum 2016World Economic Forum 2016 February 3, 2016 London, EnglandFebruary 3, 2016 London, England
  2. 2. DisclosuresDisclosures Grant Support:Grant Support: National Institute on Aging (NIA/NIH) (U.S.)National Institute on Aging (NIA/NIH) (U.S.) National Endowment for Financial Education (NEFE) (U.S.)National Endowment for Financial Education (NEFE) (U.S.) Consultation:Consultation: Financial services industryFinancial services industry Pharmaceutical industryPharmaceutical industry
  3. 3. How do aging and dementia affectHow do aging and dementia affect our capacity to manage our money?our capacity to manage our money? Short Answer: Adversely.Short Answer: Adversely. Due to their cognitive complexity,Due to their cognitive complexity, financial skills are the functional skillsfinancial skills are the functional skills first affected by and most vulnerablefirst affected by and most vulnerable to cognitive aging and dementia.to cognitive aging and dementia.
  4. 4. OutlineOutline What is Financial Capacity?What is Financial Capacity? Diminished Financial Capacity in the Elderly: Two CausesDiminished Financial Capacity in the Elderly: Two Causes The $18.1 Trillion Dollar Public Policy ProblemThe $18.1 Trillion Dollar Public Policy Problem Early Warning Signs of Financial DeclineEarly Warning Signs of Financial Decline Neuroscience and Early Detection of Financial DeclineNeuroscience and Early Detection of Financial Decline Aging/Dementia and Senior Financial AdvisorsAging/Dementia and Senior Financial Advisors
  5. 5. What is Financial Capacity?What is Financial Capacity?
  6. 6. What is Financial Capacity (FC)? ““the capacity to manage money and financial assets in waysthe capacity to manage money and financial assets in ways that meet a person’s needs and which are consistent withthat meet a person’s needs and which are consistent with his/her values and self-interest”his/her values and self-interest” Marson, Triebel, Knight (2011). Financial capacity. In Demakis, G. (Ed.), Civil Capacities in Clinical Neuropsychology. National Academy of Neuropsychology, New York, NY: Oxford Univ Press, p. 39.
  7. 7. Financial Capacity: Two PerspectivesFinancial Capacity: Two Perspectives Performance Perspective:Performance Perspective: FC as the ability to carry out financial activitiesFC as the ability to carry out financial activities Handle money, understand concepts, pay bills, etc.Handle money, understand concepts, pay bills, etc. Emphasizes role ofEmphasizes role of performanceperformance.. Best Interest Perspective:Best Interest Perspective: FC as ability to identify and protect financial best-interestFC as ability to identify and protect financial best-interest Emphasizes role ofEmphasizes role of judgmentjudgment..
  8. 8. What is Diminished Financial Capacity (DFC)? Declining abilitiesDeclining abilities from a prior higher baseline of financial activity:from a prior higher baseline of financial activity: to manage money and financial assets to meet needs, self-interest, valuesto manage money and financial assets to meet needs, self-interest, values Causes of DFC:Causes of DFC: Cognitive decline is major causeCognitive decline is major cause Mental illness, behavioral and emotional problemsMental illness, behavioral and emotional problems Medical illness, sensory losses, physical frailtyMedical illness, sensory losses, physical frailty Educational disadvantageEducational disadvantage
  9. 9. Diminished Financial CapacityDiminished Financial Capacity in the Elderly:in the Elderly: Cognitive Aging and DementiaCognitive Aging and Dementia
  10. 10. Normal Cognitive Aging “…“…the decrease in performance on various measures ofthe decrease in performance on various measures of cognitive functioning associated with increasing age in thecognitive functioning associated with increasing age in the adult portion of the lifespan.”adult portion of the lifespan.” Salthouse, T.Salthouse, T. Theoretical Perspectives on Cognitive AgingTheoretical Perspectives on Cognitive Aging, Lawrence Erlbaum Associates,, Lawrence Erlbaum Associates, Hillsdale, NJ: 1991, pp.1-2.Hillsdale, NJ: 1991, pp.1-2.
  11. 11. Normal Cognitive Aging Declines normative with aging—not disease basedDeclines normative with aging—not disease based Multiple cognitive abilitiesMultiple cognitive abilities declinedecline:: Short term memoryShort term memory Processing speedProcessing speed Executive/planning abilitiesExecutive/planning abilities ““Fluid” intelligenceFluid” intelligence Numeracy and arithmetic skillsNumeracy and arithmetic skills Age related cognitiveAge related cognitive improvementimprovement:: Experience and pattern recognitionExperience and pattern recognition ““Wisdom”Wisdom”
  12. 12. “If the chance of getting a disease is 10 percent, how many people out of 1,000 would be expected to get the disease?” Adapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar ConferenceAdapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar Conference
  13. 13. ““To those seniors and especially elderly veterans like myself, I want to tellTo those seniors and especially elderly veterans like myself, I want to tell you this: You are not alone and you have nothing to be ashamed of…Ifyou this: You are not alone and you have nothing to be ashamed of…If elder abuse happened to me, it can happen to anyone.”elder abuse happened to me, it can happen to anyone.” Mickey RooneyMickey Rooney Testimony to Senate Special Committee on Aging, March 2, 2011Testimony to Senate Special Committee on Aging, March 2, 2011 •In March 2011 Rooney stated that he was financially and emotionally abused by unnamed family members. •Control of Rooney's finances was subsequently assigned to a court appointed conservator. Adapted from EIFFE slide packet (Roush et al 2012)
  14. 14. Dementias of Aging Dementias of aging:Dementias of aging: Alzheimer’s diseaseAlzheimer’s disease Parkinson’s diseaseParkinson’s disease Lewy body dementiaLewy body dementia Frontotemporal dementiaFrontotemporal dementia Vascular dementiaVascular dementia Prodrome to dementia: Mild cognitive impairment (MCI):Prodrome to dementia: Mild cognitive impairment (MCI): Focal cognitive deficitsFocal cognitive deficits Limited functional changeLimited functional change Transitional in many cases to dementiaTransitional in many cases to dementia
  15. 15. Normal Brain AD BrainNormal Brain AD Brain
  16. 16. Loss of Brain Tissue in Alzheimer’s Disease Normal Aging Mild Cognitive Impairment Alzheimer’s Disease
  17. 17. Cognitive Signs of DementiaCognitive Signs of Dementia • Short term memory loss • Language and communication problems • Comprehension problems • Calculation/arithmetic problems • Lack of mental flexibility • Loss of judgment Assessment of Older Adults with Diminished Capacity: A Handbook for Lawyers, p. 14-15
  18. 18. Emotional/Behavioral Signs of DementiaEmotional/Behavioral Signs of Dementia • Poor grooming/hygiene • Social inappropriateness • Emotional lability • Hoarding • Delusions / Hallucinations Assessment of Older Adults with Diminished Capacity: A Handbook for Lawyers, pp. 15-16
  19. 19. Martin et al. (2003). Loss of calculation abilities in mild and moderate AD. Archives of Neurology. 60: 1585-1589.
  20. 20. •Brooke Astor in 1953 (age 51) and as an elderly lady with AD (died in 2007 at age l05). •Son Anthony Marshall and a lawyer Francis Morrissey had her sign a series of codicils to her 2002 will, allowing Marshall to redirect her fortune to his own foundation. •Marshall and Morrissey prosecuted by the Manhattan district attorneys’ office. Found guilty in 2009 of grand larceny, fraud, and other charges. Marshall sentenced to 1-3 years, imprisoned for 2 months in 2013, then granted medical parole.
  21. 21. Prevalence of Alzheimer’s Disease
  22. 22. Diminished Financial CapacityDiminished Financial Capacity in Older Adults:in Older Adults: The $18.1 TrillionThe $18.1 Trillion Public Policy ProblemPublic Policy Problem
  23. 23. % U.S. Households Across Age Group% U.S. Households Across Age Group Adapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar ConferenceAdapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar Conference
  24. 24. % U.S. Household% U.S. Household WealthWealth Across Age GroupAcross Age Group Adapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar ConferenceAdapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar Conference
  25. 25. All U.S. Households Balance Sheet [Federal Reserve Flow of Funds—2009] Total = $53.1 TrillionTotal = $53.1 Trillion From D. Laibson, Age of Reason Lecture, June 2011 Morningstar ConferenceFrom D. Laibson, Age of Reason Lecture, June 2011 Morningstar Conference
  26. 26. U.S. Household WealthU.S. Household Wealth Across Age GroupsAcross Age Groups (in $ Trillion Dollars)(in $ Trillion Dollars) Adapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar ConferenceAdapted from D. Laibson, Age of Reason Lecture, June 2011 Morningstar Conference
  27. 27. $18.1 Trillion is at Risk !!$18.1 Trillion is at Risk !! Why?Why? Normal cognitive agingNormal cognitive aging AD and other cognitive disorders of agingAD and other cognitive disorders of aging Older adults as a group have accumulated the most wealthOlder adults as a group have accumulated the most wealth but also have the greatest vulnerability to poor financialbut also have the greatest vulnerability to poor financial decisions and exploitationdecisions and exploitation
  28. 28. Early Warning Signs ofEarly Warning Signs of Financial DeclineFinancial Decline
  29. 29. NEFE Study Methods Of the overall group (n=138), we comparedOf the overall group (n=138), we compared baseline financial skillsbaseline financial skills of:of: Group 1:Group 1: “Control Normals” (CN) (n=115)“Control Normals” (CN) (n=115) normal elderly who stayed cognitively normal over 7 year periodnormal elderly who stayed cognitively normal over 7 year period Group 2:Group 2: “Control Decliners” (CD) (n=23)“Control Decliners” (CD) (n=23) normal elderly who declined cognitively at some point in 7 year periodnormal elderly who declined cognitively at some point in 7 year period
  30. 30. FCI Task Completion Times Over 7 Year Study Period B: Completion time for using a checkbook/register task 0 1 2 3 4 5 6 7 8 0 50 100 150 200 p = 0.0011 GxT = 0.053 Follow-up visit (years) Completiontime(inseconds) Green = Cognitively Stable Controls Red = Cognitively Declining Controls
  31. 31. Neuroscience and Detection ofNeuroscience and Detection of Financial DeclineFinancial Decline
  32. 32. Journal of the American Geriatrics Society, 58:265–274, 2010
  33. 33. Reduce Angular Gyrus Volume and Financial CapacityReduce Angular Gyrus Volume and Financial Capacity
  34. 34. r = 0.86 R Mid Occipital, Sup Parietal, Angular Gyrus – 2,386 mm3 R Mid Occipital, Sup Parietal, Angular Gyrus – 2,386 mm3 Y = -72 x = 30 Loss of Grey Matter Volume in Right Parietal and Angular Gyrus Predicts Impaired FC in AD Patients Presented at INS in Seattle on February 14, 2014 *Cortical volume – financial decline relationship associated with arithmetic skill
  35. 35. Some day we may be able to use MRISome day we may be able to use MRI scans to help identify older personsscans to help identify older persons at riskat risk for impaired financial capacity,for impaired financial capacity, andand beforebefore financial loss or exploitation.financial loss or exploitation.
  36. 36. Aging/Dementia and theAging/Dementia and the Senior Financial AdvisorSenior Financial Advisor
  37. 37. Graying of the FA Profession The “silver tsunami” has not spared the financial services fieldThe “silver tsunami” has not spared the financial services field Aging of profession:Aging of profession: Average age of FAs in U.S. is 50.9 yearsAverage age of FAs in U.S. is 50.9 years 43 percent are older than 5543 percent are older than 55 Nearly 1/3 plan to retire or leave industry in next decade.Nearly 1/3 plan to retire or leave industry in next decade. About 8,600 advisers will leave profession nationally in each of next 13 yearsAbout 8,600 advisers will leave profession nationally in each of next 13 years FA ranks reduced by 1.7 % annuallyFA ranks reduced by 1.7 % annually Only 5% of brokers are < 30 years and numbers are not increasingOnly 5% of brokers are < 30 years and numbers are not increasing The National Association of Personal Financial AdvisorsThe National Association of Personal Financial Advisors The average age of association members is 51The average age of association members is 51 25% of its members are over 6025% of its members are over 60 http://www.chicagotribune.com/business/breaking/ct-aging-financial-advisers-adv-biz-20150108-story.htmlhttp://www.chicagotribune.com/business/breaking/ct-aging-financial-advisers-adv-biz-20150108-story.html
  38. 38. Challenges of the Impaired Senior FA For Clients:For Clients: Poor financial services to clientsPoor financial services to clients Unsuitable investments and financial lossesUnsuitable investments and financial losses Increased financial risksIncreased financial risks Lack of succession planningLack of succession planning Poor communication and client interactionsPoor communication and client interactions Loss of trustLoss of trust For Firms:For Firms: Departures from firm protocols, poor documentation of transactionsDepartures from firm protocols, poor documentation of transactions Loss of clientsLoss of clients Law suits and legal liabilitiesLaw suits and legal liabilities Damage to firm reputationDamage to firm reputation Regulatory reviewRegulatory review
  39. 39. Aging and dementia are also affectingAging and dementia are also affecting senior financial advisors’senior financial advisors’ ability to manage our money !ability to manage our money !
  40. 40. Call for Further Research Scientific research into lossScientific research into loss of financial skills in aging andof financial skills in aging and dementia will help guide anddementia will help guide and inform educational, regulatory,inform educational, regulatory, and public policy approachesand public policy approaches toto protection of older investorsprotection of older investors.. GenerationsGenerations, Summer 2012, Vol. 36, Number 2, Summer 2012, Vol. 36, Number 2

×