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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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High Net Worth Wealth Management: Protection From Dementia

Affluent investors most fear losing their ability to make financial decisions. Learn high net worth wealth management tips to help aging investors protect themselves from the effects of dementia.

| BY Adriana Reyneri

The greatest financial fear of millionaires is losing the ability to make financial decisions, according to the latest Millionaire Corner research. Fortunately, these affluent investors can follow several high net worth wealth management tips to protect themselves in the likelihood they become cognitively impaired as they age.

The ability to make effective financial decisions peaks in middle age, then declines substantially over time, according to a well-publicized study by Harvard University researcher David Laibson.

By the time investors reach their 80s the ability to handle complicated new problems is particularly compromised, according to a blog by elder law specialist Jeff Marshall.  No surprise that the risk of dementia doubles every five years and reaches a 20 percent probability for individuals in their 80s. Significant cognitive impairment that is not dementia affects another 30 percent of these seniors. According to Marshal, that leaves half of investors age 80 and older unfit to make complex financial decisions.

Millionaire investors fear this event more than running out of retirement funds, losing their home or job, or having to work longer than planned to retire comfortable, according to our May survey of 1,400 investors. Several high net worth wealth management strategies can address these fears

“Because the risk of eventual cognitive impairment is so great, we need to prepare for it when we are in our 60s (if not sooner),” said Marshal.  Among other high net worth wealth management strategies, affluent investors can consult an estate planning attorney to discuss creating a will, establishing a financial power of attorney and setting up a trust. He advises, “Don’t wait until decline sets in to do this legal planning – it involves complicated and subtle decisions that are best made while you are at maximum competency.”

Our May survey also shows that a share of Millionaires (14 percent) fear becoming dependent on their children, but according to experts, trusted family members can be partners in the high net worth wealth management strategy of succession planning. “You need to come to terms with the reality that you are probably not going to be operating at a high level of cognitive functioning over your entire life,” said Marshall. “If your family relationships are good, help prepare your family for this reality as well.”

Simplifying and consolidating investments is another high net worth wealth management strategy available to older investors, according to column by Second Act contributor Mark Miller. For example, active investors may choose to become more passive investors past their 60s by placing assets in low-cost index funds.

As they age, investors become more vulnerable to financial fraud, and may want to set up such protections as putting limits on bank withdrawals and personal checks. Miller also urges older investors to implement high net worth wealth management strategies using a financial advisor who has a fiduciary duty, the requirement to put a client’s financial interest foremost.