Five Years is a Long Time

What are some signs of early, but undiagnosed memory issues? Medicine and money are probably two of the most obvious. Unfortunately, they can be lagging indicators because they may not be immediately apparent in real time.

Medicine may seem to be a more short-term issue, simply due to the danger associated with a person forgetting to take their regular dosage. One example might be blood pressure. It increases because it’s no longer being controlled on a regular basis by medicine. That starts a potential ticking timebomb. It’s not unheard of for an elderly person to have a stroke, then the family start piecing together what led to it. They find their family member hadn’t been taking their blood pressure medication.

Somewhere in recent months they’d started to forget to take medication regularly, or not at all. They hadn’t needed to see their doctor, so no one picked up that a new script should have been requested. From a family perspective, everything else about the person seemed fine, but in the background the cognitive decline was there, even though it wasn’t immediately apparent. This highlights medicine, if critical, can bring things to a head quickly, but it doesn’t give a true indication of when the cognitive decline began.

Money is similar. If things start going wrong financially it may take some time before it’s picked up and the issue diagnosed. How far back can the problem go? Well, we do have some idea. This is evidenced by a study released this year by the New York Federal Reserve. Titled “The Financial Consequences of Undiagnosed Memory Disorders”, it’s a deep data dive. It identifies how far back memory related financial issues begin before they’re picked up via a formal diagnosis.

Using 18 years or 72 quarters of data, ending in 2017, the study was done via data matching that cross referenced information from a US credit agency against US Medicare data. It was anonymized, but matched via other factors such as social security numbers.

The sample size was nearly 2.5 million people and, in that group, nearly 500,000 were diagnosed with Alzheimer’s or a related disorder. The researchers were looking for two types of delinquency, credit accounts and mortgage, along with the effect on credit scores in those diagnosed with Alzheimer’s or a related disorder (ADRD).

The study found average credit scores begin to deteriorate five years prior to a diagnosis. They also continue to deteriorate up until a diagnosis. As far as delinquencies, a year before diagnosis these people were 17% more likely to be delinquent on their mortgage than before they showed any signs of memory issues. They were 34% more likely to be delinquent on their credit cards a year before diagnosis.

After an ADRD diagnosis, there’s a plateau in any further effect on their credit score. Similarly, there’s a small plateau, then the probability of any further delinquency begins to fall. Not a surprise. Around this point, the person likely now has support because family members have been alerted. There’s potentially oversight on their accounts and help at hand to deal with the issue.

The fact that memory issues begin to become noticeable in financial data up to five years before any ADRD diagnosis is clearly concerning. Because while the study focuses on unpaid bills and credit scores declining, that window of time presents the opportunity for many other things to go wrong.

Cognitive decline isn’t just memory. It’s struggling to solve problems, confusion, and changes in behaviour. These issues have historically been associated with the rise of other financial problems such as impulsive purchases, making high risk changes to investments, or becoming the victim of fraud.

There’s also the potential for such data to be used in a positive way. If it can be used in a predictive manner and offers the ability to flag potential issues early, it could help with early treatment and heading off issues before they become genuine financial problems.

But there’s also the question of who is allowed to access the data. Then who and how the news would be broken to a person who may be showing early sign of cognitive decline. An email from the bank on such an issue seems slightly impersonal. A phone call from the bank isn’t much better.

Financial advisers can play a valuable role here. After ongoing meetings with clients, compiling detailed notes and advice history, they should have a reliable picture of clients. This includes cognition, behaviour, interest in various topics and the types of questions they have asked in the past. Simply, they get to know someone, but with refresher notes to compare then and now. With intervals between meetings, any noticeable changes in a client should be more apparent.

Having a relationship with the next generation could also be valuable to protect a client at risk.
Overall, it’s another reminder that it’s best to diligently have legal protections such as powers of attorney and enduring guardianships in place as early as possible.