A bizarre story of an old woman handing over property worth several thousand crores for a few lakhs made the front pages last week. Reports said a conman sweet-talked his way into getting control of the three-acre Delhi Riding Club property in the heart of New Delhi for just ₹40 lakh and a promise of lifelong care. Such cons are playing out across millions of Indian homes, albeit at varying scales. The old typically are asset rich and cash
A bizarre story of an old woman handing over property worth several thousand crores for a few lakhs made the front pages last week. Reports said a conman sweet-talked his way into getting control of the three-acre Delhi Riding Club property in the heart of New Delhi for just ₹40 lakh and a promise of lifelong care. Such cons are playing out across millions of Indian homes, albeit at varying scales. The old typically are asset rich and cash poor. They are usually lonely, especially after the loss of a spouse, and have difficult relations with siblings and children. A desire to prove their independence, mixed with fear and ignorance, leads them to make catastrophic money decisions.
An Agewell Foundation study titled Financial Status of Older People in India found that half the assets of seniors surveyed in urban areas were held in property, making them asset rich and cash poor, given that the yields on real estate are below 3%. The study also found almost 70% of high-net-worth seniors involved in family feuds. Another one-fifth were suffering ill health due to stress induced by legal matters. With about 45% of their annual income going towards medical costs, nearly 80% of the seniors had concerns about future financial needs.
Slowing mental and physical capacities make the seniors vulnerable to sharks – both within the family and outside. Emotional blackmail and withholding of assistance, along with outright coercion to get power of attorney and ownership of assets, is a big threat. In one case, medical assistance was withheld in the hope of gaining assets if the super senior died. The threat from outside is a mix of cybercrime, outright fraud and misselling of financial products.
More worrisome is that seniors seem to have no safe space for advice from sellers of regulated financial products, including banks. A friend’s 80-plus mother suddenly began to disappear in the middle of the day. One day, the friend followed her and saw her talking to a man. It turned out he was an insurance agent who was getting the old lady to sign over her retirement fixed deposits (FD) into insurance policies. Another ex-colleague recounted how her father in his early 80s with failing memory was sold insurance policies, claiming they were high-return FDs by his bank relationship manager.
This is a difficult issue to deal with in families and most shy away from an honest conversation. The children need to look out for some warning signals. A sudden new best friend is a big red flag – this is particularly dangerous if seniors live on their own. Sudden unexplained transactions, changes in assets, new investments and new power of attorneys are signals that some fraud is underway. Beware the “respectful and kind bank manager who has so much time to sit and talk” – she is usually selling the snake oil called an insurance plan.
If you are a senior, you can also make it easier to deal with the threat. First, understand that this is the last decade or two of your life – the hands will shake and the memory might fade. The two weapons in your armour are communication and community. Keep the channels of communication open with your family. Understand that tensions and breaks in families are ghar ghar ki kahani (every family’s story) – this is your time to reach out to siblings and children to begin anew. In most families, this support system will be your biggest protection against external bandits. Even if some mistake was made, do not hesitate to alert the family of the loss.
Your other weapon is the community. Whether it is a neighbourhood group, a religious one or something related to a hobby, a community where you meet and share your everyday issues is a big emotional cushion. It also helps to alert those near you of some unusual patterns in your financial life. You can even bounce off ideas in that space.
Your money strategy is to liquidate all properties other than the one you live in. Don’t have too much cash in the bank – tie up the money. A great product is an annuity that gives a regular income, but the annuity market in India does not offer great products yet. Another route is to hold assets in a conservative mutual fund portfolio and get a monthly income through a systematic withdrawal plan. A third is to maintain FDs and live off the interest. Choose a large commercial bank – public or private. A fourth is to have a mix of mutual funds for growth and FDs for income. Don’t take risks that you do not understand. Do not invest in products that promise higher returns. Give up the desire to show the children that you are still able to make decisions on your own.
I can share what I do with two octogenarians I care for. The money is handled by a financial planner – both the super seniors have direct access to the planner so they have a line of sight and rights over their assets independently. I have oversight of the planner’s activities by observing the statements periodically. Each family situation is different and the only recourse for caregivers is to open channels of communication with parents and siblings. For those who are seniors and especially super seniors – you need to write your wills, have your nominations in place and communicate with your children about your finances regularly. Beware of sweet talkers who are only being nice to winkle your assets away. Your wrinkles do not need another line of money worry.
Monika Halan is the author of the best-selling book Let’s Talk Money. The views expressed are personal
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