The retirement of the baby boom generation is upon us, presenting massive financial challenges just as the West struggles with huge budget deficits. At such a time, it might be wise for wealth managers to address the challenges of health and aging with client families as proactively as possible.
“Traditional long-term health care alternatives must be replaced with early planning, goal setting and new ways to manage health care costs,” the Financial Planning Association (FPA) has recommended.
As well as longer life expectancies, modern day society is characterized by a high prevalence of long and degenerative diseases. For example, an estimated 5.4 million Americans have Alzheimer’s disease, according to the Alzheimer’s Association. “[This] number will escalate rapidly in coming years as the baby boom generation ages,” the Association says.
The mix of these issues (life expectancy, degenerative diseases) presents a huge fiscal problem for the US, with a government budget creaking under the weight of an aging population. At a micro level, it entails terrifying issues for families like making assets last for longer and stretch to large, unexpected costs, as well as facing challenges like a member losing mental or physical capabilities. This last brings difficult decisions and issues of power of attorney.
A specialist team
For some banks, this has meant introducing a specific eldercare offering. Most recently US Trust introduced this in May, creating an eldercare services division. Wells Fargo Private Bank formalized this service in 1997 and expanded it to cover the East Coast in 2010.
It is often said that aging “creeps up” on us. Likewise, realizing there was a need to provide eldercare services crept up on Wells Fargo.
“In 1996 and 1997, the bank noticed that its trust officers were engaging in behavior, that while good for clients, was potentially risky. We were taking clients to doctor appointments, pets to the vet…Not all clients, however, received similar service,” says Keith Klovee-Smith, Wells Fargo Private Bank’s national manager for elder services.
Of course, the bank was also aware of the alarming statistics.