Diminished financial capacity, or the decline in a person’s ability to manage money and financial assets, may cause a person to become more vulnerable to investment fraud and other forms of financial abuse.
As such, the Consumer Financial Protection Bureau (CFPB), in partnership with the Securities and Exchange Commission (SEC), has created a Consumer Advisory and Investor Bulletin aimed at helping people plan for their financial future.
The five-page document includes tips on organizing important documents, such as mortgage and credit information; providing financial professionals with trusted emergency contacts; creating a durable financial power of attorney; involving relatives, friends or other professionals; and having an open conversation about investments and financial matters sooner rather than later.
A central theme of the bulletin: Hope for the best, but plan for the worst.
“Losing the ability to manage your finances may be something you’d rather not think about. We often think about our financial capabilities, like our ability to drive, as an important measure of our independence,” the agencies write. “But planning ahead may help you stay in control of your finances, even if diminished financial capacity becomes a serious problem.”
Access the bulletin here.
Written by Emily Study
