When a Client's Behavior Changes: A Guide for Advisors
At some point, most advisors will work with clients who experience cognitive decline.
The challenge is that these changes rarely become obvious all at once. They tend to emerge gradually-subtle at first and easy to explain away. A missed detail here, a repeated question there. On their own, these moments may seem insignificant. But over time, patterns can form and, in a financial context, those patterns matter.
A client experiencing cognitive decline may still be making financial decisions, sometimes with consequences that are inconsistent with their long-term goals or past behavior. Recognizing and responding to those changes is not just a matter of client service; it is part of sound advisory practice.
What Advisors May Notice
Early cognitive changes can be difficult to identify with certainty. Clients may have off days, periods of stress, or temporary distractions that affect their focus and memory.
That ambiguity is what makes early decline easy to overlook.
At the same time, advisors are in a unique position. You see clients over time, often with a longterm perspective on their financial decisions, habits, and communication style. That context can make subtle changes more noticeable.
These are some practical signs to watch for in client meetings1:
- Short-term memory issues. Repeating the same questions or stories within a single meeting or forgetting decisions made earlier in the conversation
- Language and word-finding difficulty. Struggling to recall common terms or relying on
vague descriptions for familiar accounts or concepts
- Comprehension challenges. Requiring repeated explanations or being unable to
paraphrase a simple concept after it has been discussed
- Reduced mental flexibility. A new reluctance to consider alternatives or decisions that
appear unusually rigid or inconsistent with prior behavior
No single indicator is definitive. But when patterns emerge, they may warrant closer attention.
Why Early Recognition Matters
When cognitive changes begin to affect financial decision-making, the risks extend beyond a single transaction. A client may
- request unusually large withdrawals;
- make abrupt changes to beneficiaries or long-term strategies;
- react emotionally to market events in ways that differ from past behavior; or
- become unusually susceptible to outside influence-from family members, new
acquaintances, or outright scams.
In these situations, questions may later arise about whether those decisions reflected the
client's intent and if appropriate steps were taken to support and protect them.
Early recognition allows advisors to respond thoughtfully, while the client is still able to
meaningfully participate in the conversation and in making decisions about their financial life.
When to Shift from Observation to Action
When patterns that cause concern become more consistent, it may be time to move from
observation to a more structured response.
At this stage, the advisor's role often expands from managing investments to helping protect the client's broader financial plans. Having a clear, repeatable approach can help ensure that responses are consistent, measured, and aligned with both client interests and firm practices.
Practical Steps Advisors Can Take
- Establish a "four-ears" protocol. When behavioral concerns arise, involve a second team
member in key meetings. An objective witness provides an additional perspective and can
help document the client's understanding and decision-making process.
- Trigger a comprehensive plan review. Cognitive changes can be a signal to revisit the client's full financial and estate plan, offering an important opportunity to confirm beneficiary designations, trust funding, and successor roles while the client can still participate.
- Validate the safety net. Confirm trusted contacts and powers of attorney across accounts. Position this step as a standard safeguard, ensuring that there is a clear line of communication if the client becomes unavailable or needs support.
- Involve the broader advisory team. With the client's consent, consider coordinating with the client's family members, CPA, or attorney. Early collaboration can make future transitions smoother and reduce confusion later.
- Introduce strategic pause points. For large, uncharacteristic decisions, build in a neutral
cooling-off period. Framing this as part of your standard process allows you to slow
decision-making without directly challenging the client.
- Document observations and decisions. Maintain clear records of client interactions,
instructions, and any observed changes in behavior. Documentation supports continuity of
care and helps protect both the client and the firm.
A Shift in Role, Handled Thoughtfully
Cognitive decline rarely announces itself. More often, it appears gradually in ways that can be
easy to rationalize or overlook. The advisor's job is not to diagnose or assume but to recognize
when something may be changing and to respond in a way that is measured, respectful, and
consistent.
Handled thoughtfully, these situations allow advisors to do what they do best: help clients
navigate complexity, protect what matters, and plan for what comes next, even when the
circumstances are evolving.
1Am. Bar Ass'n Comm'n on L. and Aging & Am. Psych. Ass'n, Assessment of Older Adults with Diminished Capacity: Handbook for Lawyers (2d ed. 2021), https://www.apa.org/pi/aging/resources/guides/diminished-capacity.pdf
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Flower Mound Texas 75028
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This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
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