financial functioning and also about changes in func-
tioning over time. At the present time, however, there
are few rating forms available that are specific to FC.
Most of the rating forms are designed to gauge perfor-
mance across a spectrum of basic and advanced activ-
ities of daily living and therefore may yield only
limited information specific to financial performance.
A weakness inherent in patient/informant rating
forms (and also clinical interviews) is reporter bias.
Both patients and informants can misestimate a
patient’s FC and other functional abilities, owing to
a number of factors including lack of insight, denial,
and psychiatric issues. Dementia patients and hospi-
talized elders have been found consistently to over-
estimate their functional abilities, including financial
skills, relative to results of performance-based func-
tional assessment measures. Similarly, even over a
short period of time, spousal caregivers of persons
with Alzheimer’s disease (AD) can be unstable in
their ratings of FC in their spouses. Despite these
limitations, clinicians justifiably rely on interviews
and informant reports of FC due to their ease of
administration, minimal cost, and overall informa-
tion yield.
Performance-based instruments represent a third
approach to assessing FC. In contrast to clinical inter-
view formats and observational rating scales, perfor-
mance-based instruments are not subject to reporter
bias. Instead, individuals are asked to perform a series
of pragmatic tasks equivalent to those performed in
the home and community environment. Performance-
based measures are standardized, quantifiable, repeat-
able, and norm referenced, and thus results can be
generalized across patients and settings. These mea-
sures, thus, can provide clinicians and the courts with
objective information regarding the performance of
specific financial tasks that can be highly relevant to
the formulation of recommendations and treatment
strategies.
Weaknesses of performance-based measures should
also be noted. Performance-based measures con-
ducted in a laboratory or clinical office setting cannot
take into account either the contextual cues or the dis-
tractions within the home environment that may assist
or interfere with a person’s abilities to perform every-
day financial tasks. These instruments are more
difficult and time-consuming to administer. They usu-
ally require specialized equipment and training, which
can make them costly relative to observational rating
scales.Research on Financial Capacity
The lack of conceptual models and assessment instru-
ments specific to FC helps explain the relative lack of
clinical research in this important area of civil compe-
tency assessment. Only recently have systematic
empirical studies of FC been conducted in clinical
populations. These studies have investigated patterns
of FC impairment in patients with AD and mild cog-
nitive impairment (MCI).
Studies by Daniel Marson and his group have
demonstrated significant impairments of financial
abilities in patients with both mild and moderate AD.
At the domain level, patients with mild AD performed
significantly below normal older adult controls on all
domains of financial activity, with the exception of
basic monetary skills. Patients with moderate AD per-
formed significantly below controls and persons with
mild AD on all financial domains.
At the task level, patients with mild AD performed
equivalently with older controls on simple tasks such as
naming and counting coins and currency, understanding
the parts of a checkbook, and detecting the risk of mail
fraud. However, such patients had difficulty performing
more complex financial tasks such as applying financial
concepts (i.e., choosing the best interest rate), obtaining
exact change for vending machine use, understanding
and using a bank statement, and making an investment
decision. Patients with moderate AD were substantially
impaired on all financial tasks, relative to both normal
older adults and persons with mild AD.
At the global level, mild-AD patients showed sub-
stantial impairment in FC relative to older controls,
and moderate-AD patients were impaired relative to
both controls and mild-AD patients.
Based on these initial findings, Daniel Marson and
his group have proposed preliminary clinical guide-
lines for assessment of FC in patients with mild and
moderate AD:- Mild-AD patients are at significant risk of impairment
in most financial activities, in particular complex
activities such as checkbook and bank statement man-
agement. Areas of preserved autonomous financial
activity should be carefully evaluated and monitored. - Moderate-AD patients are at great risk of loss of
all financial abilities. Although each AD patient must
be considered individually, it is likely that most
moderate-AD patients will be unable to manage their
financial affairs.
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