With seniors facing the prospect of disease and reduced cognitive ability, there should be greater discussion about what happens to their finances if they are incapable of making their own decisions.
That’s according to Gord Graves, vice president and national director, trust and estate services for the private banking arm of Toronto-based Bank of Montreal (BMO).
The bank is hoping to facilitate that conversation through its new BMO Continuity program, which is designed for affluent clients who, at some point, may be unable to make financial decisions and designate BMO Private Bankingto act in their interests while they are still living.
This is an attempt to change the current course of conversation regarding the financial assets of elderly clients, says Graves.
“I think the industry has really been focused, and I’m going to say too much, on wealth transfer at time of death,” he says.
Graves is calling for more in-depth conversations with seniors while they have the full capacity to clearly state the decisions they want made regarding their financial well-being. Within BMO Continuity,a member of the trust services team would act on those decisions should the client reach a point where he or she is unable to follow through on his or her wishes.
This is what doctors call “having the conversation,” says Dr. Michael Gordon, a geriatrics specialist who works with BMO in an advisory role regarding their trust services.
Seniors must be having clear conversations with their families about their wishes regarding issues such as their health, finances and living arrangements.
“Those plans have to be[made] in a constructive manner. They just can’t be left to chance because when they’re left tochance, often, bad outcomes occur,” says Gordon.
One of the initial steps within the implementation of BMO’s program is encouraging private banking advisors to discuss long-term decision making with their clients and knowing when to bring in the firm’s estate specialists.
“We’re not trying to make everyone experts in the in-depth conversation but we’re trying to get everyone comfortable approaching the conversations,” says Graves. “They need to be able to ask a good question and have a little bit of reserve power to go a couple of levels deeper. At that point, it’s time to bring in the experts.”
The services offered through the program include investment management; cash management (including the paying of bills); private banking services; power of attorney regarding property; facilitation of tax preparation; and lifestyle services.
Lifestyle services could range from ensuring the client’s driveway is shoveled during the winter to providing access to personal support workers.
“Hopefully, they never really need to activate some of the [program’s] features,” says Graves, “but they’ve got the peace of mind knowing that there’s someone there to take the steering wheel if it becomes required.”
The program would require a minimum of $500,000 in investible assets, with fees beginning at 2.1% of those assets and declining with an increase in assets. BMO Continuity would also include the firm’s estate services in the offering.
The program is being focused on clients who are in their 70s as this is the time period when people are facing certain realities, such as illness or watching friends or family passing away, says Graves.