Some 57% of inheritance advisers have seen instances of financial abuse or suspected financial abuse, a report by STEP has revealed.
STEP’s ‘Loss of Mental Capacity: A Global Perspective report’ also found that 40% of those surveyed said that financial abuse has increased in the last two years.
This has included cases of lasting power of attorney coercion where family members, friends or fraudsters have tried to force a vulnerable person into appointing them as a representative.
The report also found that 54% agree that safeguarding around lasting power of attorney needs to be strengthened while 82% expect the demand for mental capacity advice to increase over the next five years.
To read more on this topic, visit: Adviser network partners with regtech provider to better assess vulnerable clients
Emily Deane, head of government relations at STEP, said: “When people lose mental capacity, they are also at higher risk of financial abuse. Sadly, much of this abuse will go unnoticed and unreported.
“While it is heartening that so many practitioners (76%) reported they are confident that they can recognise signs of financial abuse of a vulnerable person, the public need to be better informed about these risks.
“We urge people to seek expert legal advice and appoint only the most trusted family members, friends and/or legal professionals to act as their representative should they lose mental capacity in the future.
“Planning ahead means that people can help ensure their wishes are followed and will help reduce the risk of financial abuse.”
STEP’s report also revealed the lack of, or inadequate monitoring of the representatives of vulnerable people (64%).
As well as a lack of, or inadequate systems in place by financial and other institutions to prevent fraud (45%).
Jaina Engineer, Alzheimer’s Society knowledge services manager, commented: “Currently, 900,000 people live with dementia in the UK. With this number set to rise, this report highlights the importance of planning ahead for a time when people may no longer be able to make decisions for themselves.
‘This report also shows the importance of a lasting power of attorney (LPA). The role of attorney carries huge responsibility, and sadly there is scope for abuse. It is vital that the attorney is someone the person trusts.
‘It’s encouraging to know so many professionals are able to spot the signs of financial abuse, but we welcome the report’s key reflection that more must be done to alert professionals and members of the public to signs of financial abuse; and the need for robust safeguarding frameworks.”