Caring for Aging Parents
How private banks are tackling the financial and emotional issues that affect older parents.
By Stacy Perman
Updated Sept. 26, 2015 9:42 a.m. ET
Wealthy families are increasingly turning to their private bankers—skipping talks about college savings and financial returns—and anxiously asking, “How do we care for our elderly parents?” and, “How can we remain independent without becoming a burden to our children?” The reason for this is as simple as it is stark: For the first time in history, two generations of retirees are coexisting within a single family, as baby boomers retire while their elderly parents are still alive. The fastest growing age group in the country consists of those 85 and older, as 75 million Americans sail past age 60 in the next 20 to 30 years.
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Photo: redheadpictures/GettyImages
Lori Sieber, trust director at Bank of America U.S. Trust Private Wealth Management in New York, says that’s why the bank launched its Eldercare Planning Services program three years ago. Its surveys repeatedly turned up long-term health-care costs and eldercare as the most pressing issues among its wealthy clientele. “It made us sit back and ask, ‘What can we do to help clients and their families with these issues that are more prevalent in society?’ ”
Eldercare programs are now being offered by firms such as Bank of America’s U.S. Trust and Merrill Lynch, Wells Fargo Private Bank, Morgan Stanley, and Northern Trust. Such programs build contingency plans that involve organizing all of an elderly client’s information in the event that he or she becomes incapacitated; overseeing and paying medical bills; navigating coverage issues associated with Medicare and the Affordable Healthcare Act, or Obamacare; vetting in-home care; evaluating long-term care facilities; and even managing the sale of a home. Some banks, acting like a concierge, might even charter a private jet to transport a patient to their chosen hospital, say, or organize specially outfitted hotel rooms for their convalescence.
They can also go deep in the trenches, helping families that are dealing with sensitive and divisive health-care choices. In one case, Chicago-based Northern Trust worked with a client who was in his 80s and in declining health, with four children from two marriages who were in disagreement about his ongoing care. The bank brought in an outside case manager to facilitate and mediate a conversation among the children, helping them reach the consensus that ultimately brought in a 24-hour caregiver to his home.
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Photo: Thomas Tolstrup/GettyImages
Some of the requests for help are enough to make you weep. Recently, a U.S. Trust client wanted to take his father—suffering from kidney failure and on dialysis—on one last grand tour through Europe. The private bank found a U.S.-based care-management company with ties to Europe, and was able to arrange for thrice-weekly dialysis treatments in each city they visited, enabling father and son to share this final experience together.
Wells Fargo similarly has arranged a host of social pursuits around the interests of aging clients, such as the opera and dining out. It once helped a client with a passion for antique dolls maintain her collection while she lived in a high-end continuing-care facility, establishing an entire room there dedicated to her collection, where she could enjoy the dolls and invite other residents to view them. More often than not, however, private-banking clients simply want help in dealing with the more prosaic concerns of finding health and wealth solutions that can mitigate emotional stress. Boiled down to its essence, clients are looking for the best care and services they can find for a loved one—before a situation reaches a crisis stage.
LITA ASKANAS, 78, was a Wells Fargo private-bank client when, three years ago, her husband, Charles, then 81, was told he had dementia. Askanas was anxiously facing an avalanche of long- and short-term issues, and was ill-prepared. “I am very bad with numbers,” she says. “I was an English major, and I let my husband do all the work.” The couple’s Wells Fargo financial advisor suggested they meet with Mia Hernandez, one of the bank’s Life Management Services specialists, who came to their Saratoga, Calif., home to discuss how she might help.
Wells Fargo’s eldercare program, founded in 1997 and based in Minneapolis, originally offered basic crisis management for seniors, which meant things like supporting elderly clients with hospitalizations. Since then, the program has evolved into its Life Management Services, available in 32 states and offering health and wellness assessments, insurance processing, and tax preparation. Complementary life- and wealth management assistance offers everything from providing fiduciary specialists to reviewing health-care documents, ensuring that beneficiary designations are current, as well as assets wisely invested. Anne Tinyo, the program’s national manager, says the program’s main goals are to ensure that clients “may age as independently and as long as possible.”
Hernandez went to work on the Askanas’ medical bills, found a home health-care provider to help with Charles, and a tax preparer to handle the couple’s taxes. When Lita couldn’t find her Social Security documents, Hernandez came to their house, went through their computer to find the information, and reordered the necessary documents. When the couple decided to take a last cruise before Charles’ condition deteriorated, says Lita, “I called Mia and said, ‘I’m going on a trip but my passport has expired. What do I do?’ Mia came to the house, got my picture, and had my passport rushed.”
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Lita Askanas wasn’t prepared for the avalanche of issues she faced when her husband, Charles, was told he had dementia. Photo: Robert Houser for Barron?s
When Charles’ condition went beyond home- care capabilities, Hernandez accompanied Lita, helping her find a suitable facility for him. No small thing: Charles had a form of dementia that often results in aggressive and violent behavior, making placement in a home difficult. In February, Charles passed away, and Lita, who said she didn’t want to live alone in their big house or burden her two adult sons, decided to move into a senior retirement home.
Hernandez is helping her research facilities and accompanying her on in-person visits. “I’m a worrier,” Askanas says, “and it means so much to me to be taken care of when I am alone and know that my finances and end of life are being cared for. I have more of a sense of freedom to do things now. I’d be scared and worried if I didn’t have this help.”
The cost for all this hand-holding usually comes “free” with the minimum account size at the private bank, often $5 million, and is generally covered by asset-management fees. At Wells Fargo Private Bank, for its high-quality eldercare service, the firm charges 0.75% on the first $2 million of assets under management; that’s on top of its regular asset-management fees. But the eldercare charge falls steadily to 0.1% when assets are $20 million and above. Generally, when a private bank engages a third party to cover a client’s need, such as medication management or patient advocacy, the outside party charges a separate fee.
BANK OF AMERICA, through its U.S. Trust and Merrill Lynch units, is a major player in this space, too. U.S. Trust provides “complimentary” eldercare services to its clients, and says it will even pass on third-party discounts to its clients when steering them to third-party providers. U.S. Trust wouldn’t disclose what the discounts might amount to, but even a little relief can help a great deal. Many high-end assisted-living facilities charge hefty entry fees. The VI in Palo Alto, Calif., structures its entry fee based on the size of a unit and ranges from $589,400 to $4,055,700; a one-bedroom unit can go for $5,110 a month, and a three-bedroom, including a den, costs $9,550 a month.
Banks are finding that any such assistance helps lift their aging clients’ burdens. U.S. Trust routinely deals with the issues thrown up by Alzheimer’s, for example. In one case, U.S. Trust provided assistance to family members living some 5,000 miles away from their mother, who had advanced Alzheimer’s. The stricken woman insisted on remaining in her own home in Hawaii. The bank researched and found a local firm that would visit the mother in her home and provide her children with weekly updates on her well-being and assessments of her needs. “It really worked out very well,” says U.S. Trust’s Sieber. “It took the emotional toll and stress off her two daughters, which was compounded by the fact that they lived so far away.”
Almost two years ago, BofA’s Merrill Lynch hired Cynthia Hutchins, an expert on financial issues affecting the elderly. She became the wealth management firm’s first director of gerontology. Her primary job, she says, is to help the firm’s financial advisors “acknowledge that we have to be talking to our clients differently” from the way they were talked to 20 years ago.
Hutchins points to her own grandmother—who retired at 55 and died three years ago at 96, four decades after she retired—as an example of how new issues of longevity, legacy planning, and meshing family needs with financial planning need to be tackled head-on. “We get inquiries from Gen Xers who have parents up in years about how to care for them, and that causes them to turn inward and ask, ‘How should I prepare for myself?’ ” she says.
Last year, the bank launched Merrill Lynch Clear, a program organized around seven categories: home, family, finance, giving, health, work, and leisure. The program’s tools support financial advisors assisting their clients with, say, Medicare and long-term care issues. And it doesn’t neglect quality-of-life issues. In February, the bank partnered with luxury-travel firm Virtuoso. “If a client wants a trip that concentrates on art, we will put together a trip to Paris and coordinate with all of the museums there,” says Hutchins.
Not all wealth management firms offer comprehensive eldercare services in-house, but are tapping outside firms to round out their offerings. Two years ago, Morgan Stanley Wealth Management broadened its client health-care offerings by partnering with PinnacleCare, a health-care advisory in Baltimore. The platform operates on a three-tier basis, with fees ranging from $7,500 to $26,500 per annum: Its basic Eldercare Assessment services include in-home-living evaluations and Medicare consultations. Its Platinum Circle Membership entitles a client to tap a dedicated personal-health advisor, travel assistance, and 24/7 emergency access. The Eldercare Membership combines the benefits of the lowest-tier offerings with services to coordinate and assess a client’s health and medical needs, such as managing medical billing and insurance claims.
Outfits like U.S. Bank and Bank of New York Mellon don’t operate dedicated eldercare divisions, but provide such services as part of their overall role. “We are seeing long-lasting care needs that can substantially deplete even high-net-worth assets,” says Margaret Paddock, who runs the Minneapolis-St. Paul private-client wealth management business for U.S. Bank.
In one case, the bank helped the children of a couple with $7 million under management prepare an asset-based annuity long-term care plan; both parents were in their 80s and had been turned down by several insurance advisors because the family had a history of dementia and the wife suffered from Type-2 diabetes. “It’s crucial to have a trusted advisor to help navigate long-term care options and where to obtain them,” says Paddock.
BNY Mellon, meanwhile, had a client who was a decade older than his wife. Worried he might become a burden should he become incapacitated or suffer a critical illness, he wanted a specific insurance policy that would cover nonqualified expenses for long-term care—for example, paying for someone to drive him around. The bank connected him with a specialist who helped him find a policy. “We don’t sell insurance,” says Ed Mooney, senior director of wealth management at BNY Mellon, “but we can connect our clients to experts.”
While firms like U.S. Trust and Wells Fargo are taking the lead building formal eldercare services for clients, others will surely follow suit. Jamie McLaughlin, CEO of J.H. McLaughlin & Co., a management consultant to the wealth management industry, notes that private banks are in an “arms race” to provide wealthy clients “the deepest, most bespoke service” possible, with eldercare services high on their priority list. It is precisely that competition that will result in more choice of services, and provide clients with a slightly less tortured walk to the assisted-living center’s dining hall.
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