Finding a financial advisor who understands elder care — what to look for

This article is for educational purposes only and does not constitute medical, legal, or financial advice. Every family situation is different, and you should consult with appropriate professionals about your specific circumstances.

Your parent has been working with the same financial advisor for fifteen years, and that person has done fine managing investments. But now your parent is 78, might need care soon, and the investment portfolio seems less relevant than it used to be. You're wondering whether your parent's advisor can help with the broader questions—how long will the money last, what should happen to assets if there's significant care costs, how do we coordinate this with Medicare and long-term care planning?

Or maybe your parent has never had an advisor, and you're looking for someone now because managing an elderly parent's finances alone feels overwhelming. You find yourself evaluating people's credentials, and everyone calls themselves a financial advisor. A person who sells insurance calls themselves an advisor. A stockbroker calls themselves an advisor. A true fiduciary advisor and a salesperson both claim to put your parent's interests first. How do you tell the difference?

The difference between having professional guidance and not having it can be thousands of dollars and enormous amounts of stress. The difference between having the wrong advisor and the right advisor can be even bigger. An advisor who understands elder care knows the questions to ask and the risks to watch for. An advisor who doesn't might give good investment advice while missing the larger picture of your parent's aging.

Financial advisors exist on a spectrum. At one end are pure salespeople who earn commissions by selling specific products. They might be knowledgeable and helpful, or they might push products that pay them well regardless of whether they're best for your parent. At the other end are fee-only advisors who charge your parent for their time and don't earn commissions on products. In the middle are various advisors with different credentials and fee structures. Knowing where someone sits on that spectrum matters.

Understanding the Basics

The first thing to understand is fiduciary responsibility. A fiduciary is legally required to put your parent's interests ahead of their own. A fiduciary advisor must tell your parent if an investment pays them extra in commission. A fiduciary advisor can't recommend something that benefits them more than your parent, even if they think it's fine. Some advisors are fiduciaries for everything they do. Some are fiduciaries only when giving certain types of advice and not others. And some aren't fiduciaries at all—they only have to recommend "suitable" products, which is a much lower standard.

Many stockbrokers and financial salespeople are not fiduciaries. They work under a suitability standard, which means they only have to recommend something that is suitable for your parent, not necessarily the best option. The difference matters. A suitable investment might return 4% while the best option returns 6%, but as long as the recommendation isn't actively harmful, it meets the suitability standard. Your parent might be fine with 4% if they don't know 6% is available. A fiduciary advisor would point out that better option.

A fee-only advisor is someone who charges your parent directly for advice through fees,either a percentage of assets under management, or an hourly rate, or a flat retainer. They don't earn commission on investments, insurance, or products. This structure eliminates the conflict of interest where an advisor profits from recommending one thing over another. It doesn't mean fee-only advisors are always better than commission-based advisors. It means you can trust that they're not getting paid extra to recommend one thing over another.

A certified financial planner or CFP is someone who has passed an exam and continues education on financial planning. The CFP credential requires a commitment to acting as a fiduciary. Having a CFP is good, but it's not the only credential that matters. Some excellent advisors aren't CFPs. Some CFPs are excellent at investments but haven't worked with elderly parents managing care situations.

What matters for your parent is not just the credential but whether the advisor has experience with situations like your parent's. An advisor who specializes in young professionals building wealth might be excellent at their job but out of their depth helping an older parent manage assets while dealing with care costs and Medicare premiums and potential need to apply for Medicaid. Ask directly whether an advisor has worked with clients in your parent's situation.

Here's the problem with finding an advisor who understands elder care: many financial advisors don't. They're trained to manage investments. They understand stocks and bonds and diversification. But they might not understand Medicaid spend-down rules. They might not realize that accessing certain assets too quickly can disqualify your parent from benefits. They might not consider the tax implications of which account to draw from for care costs. They might not ask about your parent's long-term care goals or family situation.

The best advisor for your parent in their 70s or 80s might not be the same advisor who was perfect when they were 45. A young portfolio manager is great at making your parent's money grow. An elder care advisor is good at making sure your parent's money is positioned for what's actually going to happen,care costs, taxes, Medicare, possibly Medicaid, inheritance issues, and decisions about liquidity and safety.

Some advisors specialize in elder care planning. They understand the coordination between investments, tax planning, healthcare decisions, and care planning. They ask questions like "What if you need assisted living in five years? Where will that money come from?" and "How do we structure things so your assets are protected but you still qualify for means-tested benefits if needed?" These advisors are rare and valuable.

You also need to think about whether your parent can work with this advisor going forward. If your parent is mentally sharp, they might want to stay involved in decisions about their money. If your parent is developing cognitive changes, you might need an advisor who is comfortable talking to you as well as your parent, and who understands that you might take over decisions eventually. Some advisors don't want to work with adult children involved. If that's your advisor, and you later become the one managing your parent's finances, you'll need a new advisor.

Another practical consideration is accessibility. If your parent is still managing their own finances, they need someone they can reach by phone or video. If you're managing it, you might need someone who will talk to you without your parent needing to be involved. Some advisors are strict about only talking to the account owner, which becomes a problem if you're paying their bills. Good advisors for elder parents build in flexibility for family involvement.

Your Parent's Specific Situation

Before your parent hires an advisor, they need to be honest about what they want. Some people want an advisor because they're afraid of making investment mistakes and losing money. Others want an advisor because managing investments is too much work. Others want planning help,someone to think through what happens if they need care, whether they should move assets around, how to plan taxes efficiently. These are different needs and might require different advisors.

What is your parent's net worth? Advisors often have minimums. A advisor managing $10 million in assets might not want a client with $500,000. An advisor managing $200 million might not want a client with $500,000. If your parent's assets are small, options might be limited. Investment apps, online advisors, or robo-advisors might be more appropriate than a full-service advisor. If your parent's assets are large, more advisors will compete for the business.

What is your parent's timeline? If your parent is 72 and expecting to need care within five years, the entire approach changes. You're not building wealth. You're managing a declining asset base while trying to maximize what it can do for care. An advisor who thinks in ten-year timeframes might not be the right fit. You need someone who thinks in five-year, three-year, and one-year timeframes.

How complicated is your parent's situation? If your parent has a simple situation,a small portfolio, Social Security, a pension,they might not need a full-service advisor. If your parent has a complex situation,multiple properties, significant retirement accounts, family complications, ongoing business income, or inheritance questions,they might need specialized help. Tax specialists, estate attorneys, and elder care advisors might all be needed in addition to or instead of a generalist investment advisor.

Is your parent at risk for financial abuse or poor decisions? If your parent is showing signs of cognitive decline, having an advisor who is alert to these issues can help. Some advisors will notice if transactions seem odd, if your parent is making unusual changes to their accounts, or if new people are suddenly influencing financial decisions. Other advisors don't pay attention. If there's any concern about elder financial abuse, you want an advisor who will partner with you to prevent it.

What is your parent's goal for their money? Is it to grow as much as possible? Is it to live comfortably without running out? Is it to leave something to heirs? Is it to make sure they can afford the best care if they need it? Different goals lead to different advice. An advisor might recommend a conservative portfolio for someone focused on providing for care, but an aggressive portfolio for someone focused on leaving an inheritance. Your parent needs to be clear about their priorities.

Can your parent afford professional advice? Advisor fees vary widely. Some charge 0.5% to 1.5% of assets yearly. Others charge flat fees or hourly rates. Some charge for plans but not for ongoing management. If your parent has $300,000 in assets and pays 1% yearly, that's $3,000 a year. That might be worth it if the advisor identifies $5,000 in tax savings, but it might not be worth it if your parent's situation is straightforward.

Taking Next Steps

If your parent is looking for a new advisor or evaluating their current one, start by asking specific questions. Ask whether the advisor is a fiduciary for all services or just some. Ask whether they earn commission on any recommendations. Ask about their fee structure, and make sure you understand what you'll pay. Ask whether they have experience with clients in their 70s and 80s who are dealing with care costs. Ask whether they're comfortable with you being involved in discussions even though you're not the account owner.

Look for credentials. CFP is the most rigorous certification. CFA is valuable but more focused on investments. ChFC is similar to CFP but slightly different. EA (Enrolled Agent) means they're authorized to represent people to the IRS, which is good for tax issues. These credentials aren't everything, but they suggest someone took professional development seriously.

Ask for references, specifically from older clients in situations similar to your parent's. Call those references. Ask whether the advisor thought proactively about planning for care, taxes, and benefits. Ask whether the advisor was responsive and easy to reach. Ask whether they felt heard and understood.

Run a background check. You can use the SEC's IAPD database to see if an advisor has complaints or disciplinary history. FINRA's BrokerCheck database shows similar information for brokers. If an advisor has multiple complaints or significant disciplinary history, that's a red flag.

Interview multiple advisors before your parent commits. Many advisors offer free initial consultations. Take them up on it. Have your parent and you both meet the advisor and see whether you feel comfortable. Does the advisor listen more than they talk? Do they ask good questions about your parent's goals? Do they explain things clearly? Trust your gut. If something feels off, keep looking.

Once your parent chooses an advisor, stay involved enough to understand what's happening with your parent's money. You don't need to know every detail, but you should understand the general strategy. If your parent becomes unable to manage finances, you need to already have a relationship with the advisor so the transition is smooth.

If your parent's situation changes,health decline, anticipated care need, major life event,tell the advisor. The original advice might have been perfect for the situation as it was. It might be terrible for the situation as it is now. Good advisors will reconsider their recommendations. Poor advisors will just keep doing what they've always done.

Your parent deserves a financial advisor who understands not just investments but your parent's actual life. That advisor exists, but finding them takes some effort. Taking time now to find the right person can prevent costly mistakes, reduce stress for your entire family, and make sure your parent's resources go to what your parent actually needs instead of inefficient financial products or unnecessary fees.