Having someone ensure bills are paid on time ‘is a different level of access and services than someone who has signature authority for accounts,’ says the AARP’s Emily Allen. PHOTO: ISTOCKPHOTO/GETTY IMAGES
Aging parents may need help managing daily finances to guard against costly mistakes or elder abuse. But for family members or caregivers, it can be difficult to find a trusted individual to do such work.
So-called daily money managers do everything from pay the bills to manage the mail, budget, fill out forms, organize financial papers and keep track of medical and other insurance claims. Even more important, they can help stave off fraud and abuse by being another set of trusted eyes on mom and dad’s accounts.
In some cases, “having that daily money manager can honestly save people their life savings,” says Emily Allen, vice president for income impact at the AARP Foundation.
It’s a relatively new field, though, and practitioners come from a variety of backgrounds, as well as with a wide range of experience and areas of expertise. What’s more, because the industry is pretty new, it’s also largely unregulated.
This lack of formal oversight or licensing from a government agency makes it critical for adult children to do plenty of homework before handing over the keys to their parents’ sensitive financial information.
“Consumers must do their checking to make sure that somebody who is purporting to be a daily money manager has the appropriate background, training and references,” says Sheri Samotin, president of LifeBridge Solutions LLC, a Beverly Hills, Calif., firm that offers daily money management and other fiduciary services. “Because at the moment, anybody could hang out a shingle and call themselves a daily money manager.”
The simplest way for people to start gathering potential candidates is to “ask people you trust, like an attorney, trusted family member or accountant,” Ms. Samotin says.
In addition, a relatively new professional society—the American Association of Daily Money Managers—is another starting point to consider, according to the AARP Foundation’s Ms. Allen. The national organization, based in Bellefonte, Pa., has more than 800 members, a nearly 60% increase since 2005. Members of the association subscribe to a code of ethics and standards of practice, which require them to disclose any conflicts of interest and respect client’s privacy, among other things.
“If you have somebody who is trying to sell you something and also be your daily money manager, that is a red flag,” says Ms. Samotin, who is a member of the daily managers association. If someone is “recommending you change your insurance, it can be hard to tell if that is really the best thing for you or if he or she just wants a commission,” she says.
While it won’t recommend specific members, the association tries to make it easier for families to identify qualified managers through a voluntary certification process for members. To qualify, applicants must have at least 1,500 hours of paid experience in the past three years, pass a written exam that covers such topics as bookkeeping and tax basics, and undergo a criminal-background check.
To be safe, Ms. Allen also suggests families do background checks on their own and consult the Better Business Bureau about any potential hire. Think about what specific services the elderly client needs and conduct the appropriate due diligence accordingly, she says. Having someone ensure bills are paid on time “is a different level of access and services than someone who has signature authority for accounts.”
“If someone is really incapacitated,” she says, “the risk can be higher because you have [to hire] someone with much more access.”
Karen R. Caccavo, a daily money manager in New City, N.Y., says families or caregivers also should determine whether a candidate is bonded or has liability insurance.
Sometimes nonprofits or county agencies will offer some kind of daily-money-management services performed by vetted volunteers.
The Pima Council on Aging in Tucson, Ariz., for one, has about 25 volunteers who help older adults with bill paying. The council performs a background check on its volunteers, including fingerprints, and requires three written references, says W. Mark Clark, group president and chief executive.
Whoever is eventually hired, Ms. Allen recommends keeping tabs on their work by checking in monthly, perhaps by setting up “view only” access to bank accounts, to make sure there are no irregularities.
Ms. Prior is a reporter for The Wall Street Journal in New York. Email:firstname.lastname@example.org.