The “cost of death” to Edward Jones’ business is about $7 billion a year—that’s seven billion dollars in assets under management that vanish when clients die and their heirs make other arrangements for the funds. But that’s not the real punchline.
John Beuerlein, a partner at Edward Jones and panel moderator at Olin’s third annual Wealth & Asset Management Research Conference, held Aug. 21-22, shared that number during a session entitled “Elder Investing and Alzheimer’s Cause Marketing.”
The punchline, Beuerlein said, came when Edward Jones leadership realized they have about 150,000 clients suffering from Alzheimer’s Disease, which costs families about $47,000 a year to manage. That’s about $7 billion.
With the number of victims expected to triple in the next 20 years, he said, and the American Medical Association projecting the cost of medical care for dementia care patients growing at twice the cost of other health care services, “Alzheimer’s becomes three times as bad for our business as death.”
It drove Edward Jones to double down on support for Alzheimer’s research and support organizations—and to consider how to best counsel clients to prepare their estates for the possibility of an end-of-life bout with dementia.
The conference gathered more than 200 wealth and asset management practitioners, researchers, and students for two days at Olin’s Emerson Auditorium. Sessions ranged from a review of financial management academic research to financial planning in a low-return environment to “The Weight of Regulation and the Rise of Private Equity.” The conference agenda was focused on improving the science and practice of wealth management, a goal of Olin’s new wealth and asset management master’s program in an age of increasing complexity for investors and advisors.
“This conference is an important element of the new master of finance in wealth and asset management, launched at Olin two years ago when we also launched the conference,” Olin’s Rich Ryffel, organizer of the conference, said in his kickoff remarks. “That program started with 47 students last year, and this year we enrolled 63.”
He said the conference was structured around the theme of finance—yesterday, today, and tomorrow. “Yesterday, with research which studies the past,” said Ryffel, who is also the market manager for the J.P. Morgan Private Bank in Missouri. “Today, with how we can put that research into practice. And tomorrow, with how technology–FinTech–will impact practice.”
Elder investing and dementia
Focusing on just one session, however, Beuerlein introduced a trio of panelists with first-hand experience dealing with the emotional, physical, and financial issues surrounding dementia care—starting with Professor Lonnie Schicker of the University of Minnesota, who herself was diagnosed with Alzheimer’s four years ago.
“I would have started learning how to manage my money when I was much younger. Even if I had the money, I wouldn’t have known how to manage it through my illness,” she said, noting that her savings and 401(k) are virtually wiped out. Her son, who supports her now, “has broken his bank account as well.”
Andy Hunt, a suburban Philadelphia financial advisor for Edward Jones, said his father died from Alzheimer’s and his family was “shaken out of our denial” when the IRS sent a $7,000 bill for unpaid taxes.
The session was a poignant and pressing look into the power and importance of wealth management, offering ideas for financial planning professionals as they develop strategies for their clients. Hunt spoke about the “imaginary bus ride” he takes his clients on when they consider options for coping with dementia care. The ride includes stops at the accountant for tax issues, the neurologist to demonstrate the patient’s disability, and an elder law attorney for estate planning, power of attorney, and more.
“I was drafted into the financial services industry,” Hunt said. “I came home one Christmas and my mother had a whole list of papers and booklets and whatnot. She said my dad ‘doesn’t do this anymore—so you have to do it.'”
Pictured above: Ohad Kadan, H. Frederick Hagemann, Jr. Professor of Finance, conducting a summary of research in finance for attendees at the third annual wealth and asset management conference at Olin.