A new report from Bloomberg tells the story of Peter Doelger, who by the age of 78 was worth around $50 million. Doelger built his own company, sold it to a conglomerate and successfully bet the proceeds on stocks and oil.
Doelger is doing well financially but not mentally. His family says he started to show signs of dementia around the time he made his fortune, and after signing it all over to JPMorgan Chase & Co. to manage, Doelger's holdings dwindled in value all the way down to around $1.5 million.
The family's claim is that Doelger's fortune was mismanaged by JPMorgan without his knowledge. Financial experts at the banking giant were supposed to keep Doelger's money and holdings intact and growing, but instead they allegedly whittled it down to just about nothing.
In the end, Doelger and his family had to sell their Boston condominium and move in with relatives since his fortune is now a thing of the past. And apparently this kind of thing is happening more and more as wealthy baby boomers on the verge of dementia get taken advantage of by the corrupt financial system.
"We had 100 percent trust in them that they will manage our assets," stated Peter's wife Yoon about Doelger's relationship with JPMorgan. "We didn't expect them to make us a fortune but at least make us comfortable."
(Related: Learn more about how to protect against Alzheimer's and dementia with these five foods.)
Wall Street, a den of vipers
The Doelgers are now fighting it out legally in Boston federal court to try to hold JPMorgan accountable for letting a wealthy client sliding into dementia to lose almost his entire fortune at the company's hands. The Doelgers' hope is that JPMorgan will eventually be forced to pay out at least some of what was lost.
Peter, who is now 86, can barely even remember what happened leading up to this point. In an interview, he attempted to tell the story of how he built his business, but got lost in the conversation trying to explain what happened after that, including his relationship with JPMorgan.
A court-ordered exam declared Peter unable to testify in the litigation, and both sides of the case have agreed not to contest this ruling.
"The couple's situation spotlights an issue that has always lurked on Wall Street but is surging in scale as the baby boom generation retires with a record stockpile of wealth," Bloomberg reports.
"Legions of boomers have enough saved to be deemed 'accredited' or 'sophisticated' investors under U.S. securities laws, qualifying them to buy into riskier, complex asset classes with juicy commissions for intermediaries. Yet many of those clients will inevitably face cognitive decline. The industry lacks a formal system to detect when that happens."
A Securities and Exchange Commission (SEC) study on financial sophistication found that households of accredited investors who are at least 80 years in age typically score far worse on competency tests than unaccredited investors a few decades younger.
"This case screams out for more attention to how waning cognitive abilities affect older people's capacity for financial decision-making and independent financial management," commented Naomi Karp, a consultant on aging, law and policy who worked as an analyst for the Consumer Financial Protection Bureau, about the Doelger case.
"We need to put more responsibility on financial firms since they are well-positioned to detect warning signs."
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