They may not think it’s a common
occurrence among their own clients, but financial advisors cite financial abuse
of elders as a top ethical concern.
That’s according to new research
from the American College of Financial Services. In its Ethical Issues in
Retirement Income Planning Survey, the American College sought to identify
financial services professionals’ primary ethical concerns in retirement income
planning, gauge how financial professionals view the industry’s current ethical
challenges and understand how ethical practices can be improved in retirement
income planning.
The survey found that more than
80 percent of respondents are concerned about protecting their clients from
financial elder abuse — in fact, it was their top-ranked ethical concern. But
just 28 percent believed it was a common occurrence.
Approximately two thirds (64
percent) of respondents thought the ethical nature of the retirement planning
industry was in good hands, with just 6 percent saying they believed that
outright lying occurred by advisors. In addition, only 27 percent believed that
instances of overcharging clients were common.
But when it comes to elder
concerns, specifically, they had a number of misgivings about the knowledge
level of both consumers and advisors across a variety of subject areas. For
instance, 88 percent were concerned about their clients’ ability to properly
understand their retirement income plans. In addition, 85 percent were
concerned that clients do not understand the products and services they are
offered.
Sixty-four percent were worried that
retirement income advisors in general were unable to perform their jobs because
of inadequate training, and 68 percent were concerned that retirement income
advisors in general are not keeping up with legal changes that impact their
clients’ retirement income plans.
When it came to social security,
most survey participants agreed that a good retirement planner should
understand the program, while 71 percent worried that other financial services
professionals lacked the knowledge to properly utilize social security claiming
strategies for their clients. Additionally, a mere 2 percent thought that
financial service professionals overall were extremely knowledgeable about
Medicare.
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