WASHINGTON, Nov. 10, 2026 (GLOBE NEWSWIRE) — CFP Board today published a Guide to Planning for and Managing Diminished Financial Capacity in Clients. As the proportion of Americans over the age of 65 is growing steadily, this timely resource will help CFP® professionals prepare Clients for the possibility of diminished financial capacity and manage the Client relationship if signs of diminished capacity emerge. The guide is part of an ongoing series of resources created by CFP Board to support CFP® professionals in their practice.
“A financial planner may see changes in someone’s financial life before anyone realizes there’s a larger problem,” said CFP Board CEO K. Dane Snowden. That’s the value of knowing a client well and building trust through every stage of the client relationship. CFP® professionals are in a unique position to help people prepare early, put safeguards in place and stay in control of their financial lives.”
What Is Diminished Capacity?
The signs of diminished capacity can include unusual spending, abrupt changes in a will or beneficiary designations or struggling to keep track of basic household finances. Age, accident, illness or other medical conditions can all lead to a decline in a person’s ability to make financial decisions or understand their consequences. Diminished capacity is not always an “all-or-nothing” condition, but it can leave a Client more exposed to risky financial behavior, scams and financial exploitation. Without advance preparation, both the Client and the CFP® professional may be left with few good options when signs emerge.
New Ethics Requirements
The guide applies CFP Board’s Code of Ethics and Standards of Conduct (Code and Standards) and establishes two requirements for planning for a Client’s diminished capacity that apply to Financial Planning engagements that include monitoring responsibilities.
- Provide the Client with the opportunity to designate one or more trusted contacts with whom the CFP® professional is authorized to share information when concerns arise.
- Recommend that the Client develop an appropriate estate plan, which may include creating a durable financial power of attorney.
The CFP Board Ethics CE program that will run from January 2027–December 2028 will discuss these requirements. A CFP® professional will have a year to incorporate the requirements in their practice after attending the course.
The new guide also offers CFP® professionals valuable practical advice, including:
- Tips on designating trusted contacts, an explanation of what a trusted contact can and cannot do and a comparison of general, durable and springing powers of attorney;
- Conversation starters and guidance on discussing aging-related topics, such as help with finances, healthcare decisions and housing, before signs of diminished capacity appear;
- Warning signs of diminished capacity and financial exploitation; and
- Best practices for managing the engagement, protective actions, reporting to governmental authorities and building a comprehensive team of professionals.
The guide stresses that CFP® professionals are not expected to be expert diagnosticians, but should be sensitive to red flags, act promptly, document carefully and follow their Firm’s policies and procedures and applicable laws.
Download the Guide to Planning for and Managing Diminished Financial Capacity in Clients.
ABOUT CFP BOARD
CFP Board is the professional body for personal financial planners in the U.S. CFP Board consists of two affiliated organizations focused on advancing the financial planning profession for the public’s benefit. CFP Board of Standards sets and upholds standards for financial planning and administers the prestigious CERTIFIED FINANCIAL PLANNER® certification — widely recognized by the public, advisors and firms as the standard for financial planners — so that the public has access to the benefits of competent and ethical financial planning. CFP® certification is held by more than 110,000 people in the U.S. CFP Board Center for Financial Planning addresses diversity and workforce development challenges and conducts and publishes research that adds to the financial planning profession’s body of knowledge.
CONTACT: Jane Riley Jacobsen, Director of Public Relations, P: 202-379-2305, E: media@cfpboard.org
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