Study: Problem Likely to Grow; Education, outreach critical
October 17, 2014- MINNEAPOLIS–(BUSINESS WIRE)–Elder financial abuse* remains an under-reported and misunderstood issue – one likely to get worse as America’s population ages – according to the 2014 Safeguarding Our Seniors study** from Allianz Life Insurance Company of North America (Allianz Life®). As America’s population ages and life expectancy rises, more cases of elder financial abuse are possible.
“As America’s population gets older, the number of seniors with age-related cognitive impairments naturally is expected to grow. Greater awareness about the frequency of elder financial abuse will foster more discussion about ways to keep our seniors safe from financial exploitation.”
The study of more than 2,000 Americans – both potential victims (ages 65+) and other adults (ages 40-64) – found that misconceptions persist about the most likely sources of abuse, and the financial impact on victims, though under-reported, is often significant. Allianz Life leveraged the study’s insights to create educational materials for financial professionals and helped build a new community outreach program staffed by Allianz Life employee volunteers.
“Although past studies have explored elder financial abuse, it’s crucial to get a current picture to help determine how the financial services industry can best address this difficult yet preventable problem,” said Allianz Life President and CEO Walter White. “As America’s population gets older, the number of seniors with age-related cognitive impairments naturally is expected to grow. Greater awareness about the frequency of elder financial abuse will foster more discussion about ways to keep our seniors safe from financial exploitation.”
Under-reported and Misunderstood
While the number of elders in the Safeguarding Our Seniors study who said they have suffered financial abuse is relatively small (5%), that number is likely an underestimate because some seniors might not self-identify or report abuse. Given that the senior population is expected to surpass 54 million in 2020,1 the Allianz Life study suggests that millions of American seniors could experience financial abuse as nearly one in five (19%) of adults age 40-64 reported they have an older friend or family member who has been a victim in the past. Of this 19%, more than half (55%) said the victims did not report the financial abuse.
The Safeguarding Our Seniors study highlights a lack of awareness about the sources of elder financial abuse. When asked where the biggest threats actually come from, the majority of both elders (80%) and family/friends of potential victims (69%) rated telemarketing contact as the most likely source of abuse followed by Internet scams (68% elders; 47% family/friends) and U.S. Mail solicitation (52% elders; 39% family/friends).
Of those elders who reported experiencing financial abuse, the incident was more likely to have been perpetrated by a family member, friend, or caregiver (52%) than by a stranger (22%). This is consistent with previous studies suggesting that elder financial abuse is commonly committed by people familiar to the victim.2
Significant Impact, Expanding Target
For those who are victims, the Safeguarding Our Seniors study confirmed the impact is often significant. The study found an average financial loss of about $30,000 and more than 10% of victims said they suffered losses of $100,000 or more.
Unfortunately, aging, wealth, and decreasing mental capacity are factors that can make tomorrow’s elders a target for financial abuse. The U.S. Census Bureau projects that more than 20% of the total population will be age 65 or older by 2030.3 Among this group, many will likely hold considerable wealth. Baby boomers control more than $16 trillion in household investable assets, according to a LIMRA 2011 report.4
Cognitive impairments or diminished capacity will also play an important role as this issue develops. Consider that more than five million Americans are currently living with Alzheimer’s disease.5
Supported by the findings from the Safeguarding Our Seniors study, Allianz Life created programs and materials to educate financial professionals and consumers about elder financial abuse:
Preventing Elder Financial Abuse education course – This course helps financial professionals understand the scope of the problem and provides simple steps they can take to protect their clients. Available to financial professionals who work with Allianz Life, the Preventing Elder Financial Abuse course is one of many topics with support materials that Allianz Life offers to more than 20,000 financial professionals every year.
Preventing Elder Financial Abuse Tip Sheet – This tip sheet from the Better Business Bureau contains red flags to watch for and tips for prevention, is now available via allianzlife.com/sos.
In addition, Allianz Life partnered with community organizations to deploy its employee volunteers in the community to raise awareness of elder financial abuse. Working together with the Better Business Bureau, Allianz Life created the Safeguarding Our Seniors volunteer program that sends volunteers to senior or other community centers to educate and encourage discussion on the topic. Allianz Life also supports the Alzheimer’s Association MN-ND that provides advocacy, support services, and care consultation for families, health care providers, and individuals affected by Alzheimer’s disease and dementia. Allianz Life’s annual Driving to Donate Charity Golf Tournament raised more than $185,000 from employees and vendors in 2014 and more than $725,000 for the organization over the past five years.
“As demographic trends point to a growing senior population, more people than ever before will be affected by elder financial abuse,” added White. “Allianz Life is committed to taking a leadership role in educating financial professionals, the community and employees about how to prevent elder financial abuse and being a part of the solution.”
About Allianz Life Insurance Company of North America
Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2014, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 148,000 employees worldwide. More than 83 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.
*Elder financial abuse is defined in the study as the unauthorized or improper use of resources of an elder family member or friend, who is 65 years or older, for monetary or personal benefit, profit, or gain.
**The 2014 Safeguarding Our Seniors Study was conducted by Ipsos via their online iSay/Ampario Panel from March 11 – 21, 2014 with 2,248 panel respondents ages 40-65+ (n=1,025 for adults ages 40-64 and n=1,223 for adults ages 65+) and was commissioned by Allianz Life Insurance Company of North America.
1 U.S. Department of Health and Human Services, Institute on Aging, Projections of Future Growth
2 National Adult Protective Services Association, Elder Financial Exploitation, June 2012.
3 U.S. Census Bureau, An Aging Nation: The Older Population in the United States, May 2014.
4 Know Your Customer: How a New Generation of Software Helps Advisors to Identify the Right Solutions for Retirees,” LIMRA Regulatory Review, April 2011.
5 Alzheimer’s Association, Alzheimer’s Disease Facts and Figures, 2014.