Tailoring Advice for the Elderly Brain

Dan SolinAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

As the global population ages, there's a pressing need to understand the unique financial challenges accompanying this phase of life. One of the lesser-discussed facets of aging is the neurological changes in the brain and how they influence financial decisions.

For financial advisors, an appreciation of these changes fosters more profound empathy with older clients and fine-tunes their strategies.

The elderly brain

As we age, our brains undergo various structural and functional changes.

Aging is associated with declines in cognitive performance, particularly in tasks that require quick processing or communicating of information needed to make a decision.

The size of the brain also decreases with age, and both gray and white matter regions are impacted.

Age-related illnesses, like Alzheimer's disease, accelerate the rate of cognitive decline and neuronal dysfunction.

Impact on financial decision-making

Here’s how these neurological changes impair financial decision-making:

Reduced risk appetite: Older adults may become risk-averse due to neurological shifts affecting decision-making processes. They might favor more conservative investment opportunities, even if they can afford (or need) to take more risk.

Conversely, one study found evidence that overconfidence in their financial understanding caused some older investors to take excessive financial risk.

Cognitive delays: With processing speeds reduced, older individuals take longer to understand financial products or strategies, requiring more patience, clarity, and understanding.

Memory decline: Challenges with memory means older clients forget discussions or advice, necessitating frequent recap sessions or written summaries.

Memory varies widely, even among those without cognitive impairment. Many older adults believe their memory is better than it is.

One study found misperceptions of memory skills in older adults correlated to lower scores on financial decision-making tests.

Vulnerability to scams: Older adults are disproportionally targeted by scams. One study found older age (among other factors) was “strongly tied to scam susceptibility.”

How to cope

Here are suggestions for coping with older clients who may be experiencing cognitive decline but are still actively engaged in managing their money:

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Simplify information: When discussing the complexities of a diversified portfolio, you might use a pie chart showing the percentage of different investments instead of presenting a dense report filled with figures and terms.

Use relatable analogies, for example, likening diversified investments to a balanced diet – each slice of the pie (or type of food) has its role and benefit.

Verify understanding: After explaining a financial concept or recommendation, ask your client to summarize it in her own words.

Protect: Share real news stories of common scams targeting older people, like the infamous grandparent scam.

Consider whether the client needs the protection of a durable power of attorney for financial matters.

Regular feedback: At the end of each session, ask for feedback. A simple question, "What did you find most valuable about today's discussion?" will provide valuable insight.

Physical comfort: Make your office comfortable for older clients. Have larger fonts in printed material, ensure the office space is accessible, and offer refreshments during meetings.

Leverage technology judiciously: While some elderly clients might be tech-savvy, others could feel intimidated. Offer digital and paper records. Offer to host video calls instead of in-person meetings for those with mobility issues.


The intersection of neurological aging and financial decision-making is nuanced. Well-informed, empathetic financial advisors will cater to the unique needs of their elderly clientele, ensuring not just financial security but fostering meaningful, trust-filled relationships.

Dan trains executives and employees in the lessons based on the research in his latest book, Ask: How to Relate to Anyone. His digital marketing firm makes extensive use of artificial intelligence to help advisors increase their SEO rankings and improve their marketing and helps advisors integrate AI into their practices.

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