September 12, 2019 Money Management | 9
News
ASIC approves AFCA naming firms BY MIKE TAYLOR
THE Australian Securities and Investments Commission (ASIC) has approved changes to the Australian Financial Complaints Authority (AFCA) rules allowing the authority to name the financial firms it rules both for and against. ASIC said AFCA had applied for the rule change to enable the identification of firms following a public consultation process, although consumers would remain anonymous. ASIC said that in its first six months, AFCA had received 35,263 complaints and while publication of determinations had been a longstanding feature of the external dispute resolution schemes, the names of firms involved in financial services, superannuation and credit complaints had not been published. ASIC said it viewed that the naming of firms would help identify conduct or market problems within firms or affected specific products or services, as well as highlighting where firms had done the right thing.
RETIREMENT INCOME MONTHLY UPDATE
How to Spot Elder Financial Abuse Elder financial abuse is not a new problem. Throughout Australia the elderly have lost their savings, valuables and homes through financial abuse but it’s only now that serious steps are being taken to address the issue. As a financial adviser, you’re in a unique position to spot questionable behaviour and create a safe environment where clients can speak openly without pressure or intimidation. WHAT IS ELDER FINANCIAL ABUSE?
Elder financial abuse is the theft or improper use of money or assets of an elder person (generally aged 65 or older). “It can include but is not limited to, behaviours such as using finances without permission, using a legal document such as an enduring power of attorney for purposes outside what it was originally signed for, withholding care for financial gain, or selling or transferring property against a person’s wishes.”1 It can happen to any elderly person regardless of their socio-economic status. It can include a broad range of conduct from deception to intimidation from family members, friends or carers. Whilst the number of Australians suffering financial abuse is unknown, it’s conservatively estimated to be at least 10% of older Australians each year and the perpetrators are most likely their own adult children.2 COMMON WARNING SIGNS
Do lawmakers understand the damage to accounting and planning? THE Government needs to understand the impact of its over-regulation of the financial planning and accounting sectors and, in particular, the impact on what amount to small and medium-sized businesses, according to Australian Wealth Solutions principal, Sam Zervides. However, he said the growing calls for government to stop interfering, over-regulating and irreparably harming the important financial planning and accounting sectors were continuing to fall on deaf ears with the economy, employment and consumers equal losers. Zervides said planners and accountants could accept the decline in their livelihood if it was the result of new technologies, outsourcing, overseas competition or product innovation but it was a bitter pill to swallow when it was the result of relentless and incoherent reform and imposition of government red tape, over policing and escalating compliance costs. “Costs that are making the provision of affordable professional financial advice and services harder and harder to provide for clients are simultaneously driving practitioners out of the industry,” he said. “The financial planning and accounting professions are predominantly comprised of SMEs. Collectively they’ve been severely impacted by government-initiated reforms with the large institutions, fund managers and industry funds the major beneficiaries.” Zervides said it appeared the legislators and advocates of industry reform had no appreciation or regard for the damage they were inflicting and the legacy being left in their wake.
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A combination of diminished mental capacity and questionable changes in behaviour can be red flags signalling financial exploitation. Below are some of the things to look out for when meeting with your older clients: 1. Diminished capacity or vulnerability • Signs of depression, loneliness or forgetfulness; • Changes in their ability to care for themselves or becoming dependent on others for care; and • The person providing your client’s care or managing their finances makes you feel uncomfortable. 2. Questionable changes in financial behaviour • Suspicious signatures on financial transactions; • Sudden/unexplained changes to the power of attorney, will, or ownership of assets; • A new ‘best friend’ in your client’s life who is making decisions; • Sudden or large amounts of money are given to family, friends, charities or others; and • An overall disappearance of money, valuables or financial statements. WHAT TO DO IF YOU SUSPECT ELDER FINANCIAL ABUSE?
As a trusted financial adviser to older clients, not only can you help make their money go the distance, you can also help them if they become vulnerable to financial abuse. By engaging with your client on an emotional level, you can build trust beyond conversations about their investment portfolio. This is particularly important when they’re vulnerable, as you can provide them a safe space to talk about their circumstances. If you do see the warning signs for financial exploitation, you can call 1800 ELDERHelp (1800 353 374) which connects you to information and advice on elder abuse. 1 National Plan to Respond to the Abuse of Older Australians [Elder Abuse] 2019-2023, Council of Attorneys-General, 19 March 2019. 2 Elder Abuse, Bina Brown, https://thirdagematters.com.au/elder-abuse/, 2 April 2018.
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