Banks should intervene when clients are impaired
Mary* lived independently in a retirement village. She managed her house and enjoyed an active social life.
Sarah*, Mary's niece, started to notice that her aunt's behaviour had become peculiar. Mary bought a new red couch when her existing one was still new. Then she decided to buy a power-lift massaging armchair costing R38,000. Mary had never before made such rash purchases.
Sarah was perplexed by Mary's decisions, but reasoned that Mary had a right to buy a red couch and an armchair. However, when Sarah found out Mary's pharmacy account was five months in arrears, she knew something was wrong. Mary had always been fastidious about keeping her financial affairs in order.
Shortly afterwards, Mary was diagnosed with dementia.
Mary is one of an estimated 2-million South Africans living with dementia. The number of such people in Sub-Saharan Africa could swell to 7.62-million by 2050, according to the World Health Organisation, yet no dementia initiatives have been established by any country in the region.
Dementia is a general term for memory loss due to damage or disease of parts of the brain used for learning, reasoning, decision-making and language. It is a degenerative condition which interferes with a person's daily life. Alzheimer's disease is the most common form of dementia. It is a progressive condition which initially impairs a person's ability to manage complex tasks, such as work or managing finances, to ultimately resulting in a person requiring help in daily tasks such as bathing, dressing and feeding.
The risk of developing dementia doubles roughly every five years. It is estimated that dementia affects one in 14 people over 65 and one in six over 80. Despite advanced old age being one of the biggest risk factors for dementia, it is not a normal part of ageing.
One of the first signs of dementia is a decline in financial capacity. Some individuals may have the disease for three to five years before being clinically diagnosed. They and their families may not be aware that their decision-making capacity is impaired. Red flags include large ATM withdrawals, transfers of large sums, repeatedly forgetting PIN numbers and non-payment of bills.
Dr Lee Miller, a GP serving Rondebosch's older population, says she sees such behaviour all the time. "Most of my patients who have dementia show it through the financial stuff. I would say at least 70%."
As a response to this phenomenon, Dr Jason Karlawish at the University of Pennsylvania in the US, developed the concept of "whealthcare", which proposes that not only doctors but the banking and financial services industry should be alert to picking up signs of cognitive impairment.
Kate Brown, a financial adviser with a special interest in late-stage retirement planning, says financial planners who meet their clients regularly may notice not only a reticence to deal with financial matters but also other changes in the affected clients' outlook and abilities. If her team members feel that a client is exhibiting signs of cognitive impairment, they encourage the client's adult child or trusted family member or friend to accompany the older client to their next review.
"Our aim is for the client to remain as independent as possible for as long as possible but to ease the transition to accepting help from a family member."
It is essential at this stage that power of attorney, curatorship and administration are discussed. "Mental capacity often declines in waves," Brown says. "The person may understand the matter in hand and be able to discuss preferences and make a decision, but they may not be able to recall this the next day.
"As capacity decreases it becomes important to ensure that all the relevant information and consequent decisions are written down."
Those working with dementia sufferers have recommended that the banking and financial sectors:
- Use financial data and analytics for early detection. Monitor transaction activity that is not consistent with regular behaviour.
- Train staff to detect and respond. Training should cover warning signs that may signal financial exploitation, including behaviour and transactions that are red flags, and steps to prevent exploitation.
- Enable older account holders to provide advanced consent to sharing account information with a designated, trusted third party. Offer opt-in account features such as cash withdrawal limits, geographic transaction limits, alerts for specified account activity, and view-only access for authorised third parties.
- Provide consumers with information about planning for incapacity. Outline powers of attorney, curatorship and administration.
- Educate older account holders and the public about dementia and participate in multidisciplinary network initiatives.
Dementia is not just an individual, family or health-system challenge. It affects the fabric of society and requires action by many and varied stakeholders.