Neuropsychological Assessment and Financial Capacity in Older Adults: A Review Based on Up-to-Date Knowledge

Introduction

Longer life expectancy is a worldwide phenomenon that raises economic, health, legal and ethical issues (Giannouli, 2017a; 2019; 2020). The growing number of people over 65, raises a dire need for active aging and a need for a life plan for the life span (Giannouli, 2016) in order to increase quality of life during the aging process (World Health Organization, 2002).

Although the process of normal aging in general has an effect on basic cognitive functions, this effect is continuously changing over time, thus recognizing and responding to changes in capacity through periodic reassessment/systematic identification longitudinally should be a priority for healthcare professionals. In contrast, individuals with mental, psychiatric and/or physical disorders, may present with deterioration or improvement of cognition (due to changes in severity and nature of symptoms), while others such as those with intellectual disabilities typically show a more stable pattern of marked deficits not fluctuating over time (Giannouli, 2022a). Overall memory, attention, executive functions, problem-solving, language, as well as sensory and perceptual capacities may diminish in older adults (Anderson, 2008; Glisky, 2007; Lezak et al., 2004).

The U.S. Social Security Administration (SSA) defines financial capability as ‹‹a beneficiary’s ability to manage or direct the management of his or her benefits›› (National Academies of Sciences Engineering and Medicine, 2016) encompassing also ‹‹access to financial services, behavioral factors, social influences, and emotions›› (Collins, 2013). Regarding the evaluation of financial capability, there is a distinction between financial competence and financial performance. Financial performance is defined as ‹‹an individual’s degree of success in handling financial demands in the context of the stresses, supports, contextual cues, and resources in his/her actual environment›› thus emphasizing the real-world functioning, while financial competence refers to ‹‹the financial skills one possesses, as demonstrated through financial declarative and procedural knowledge (financial literacy) as well as financial judgment (understanding, reasoning, and appreciation), typically assessed in a controlled (e.g., office or other clinical) setting›› (National Academies of Sciences Engineering and Medicine, 2016). Financial competence has been also defined as ‹‹the capacity to manage money and financial assets in ways that meet a person‘s needs and which are consistent with his/her values and self-interest›› (Lichtenberg, Qualls, & Smyer, 2015). Financial capacity is also defined as ‹‹a range of conceptual, procedural, and judgment skills›› (Sherod et al., 2009), thus, the terms financial capacity and financial competence can be treated as interchangeable (Marson et al., 2013; Sherod et al., 2009) and of pivotal importance in the neuropsychological assessment of the aging population (National Academies of Sciences Engineering and Medicine, 2016).

Although, there is a plethora of findings supporting that objective cognitive changes do relate to changes in financial skills (Widera et al., 2011), a few studies (except for the U.S.) investigate the management of one’s finances, a very important instrumental activity of daily living (IADL) in older adults with or without neurocognitive disorders. Nevertheless, direct influences of brain pathology have been supported, and more specifically underlying brain differences in regions involved in socio-emotional functioning (Spreng et al., 2017), as well as changes in left angular gyrus and amygdala have been supported (Giannouli & Tsolaki, 2019a; Griffith et al., 2010; Nowrangi et al., 2022; Stoeckel et al., 2013) along with the well-known frontal lobe lesions linkage to poorer performance in financial planning (Goel et al., 1995). Also, metabolic abnormalities of posterior cortical paralimbic regions are correlated to the degradation of financial abilities in mild Alzheimer’s Disease (AD) (Griffith et al., 2007).