What is the advisor’s role in relation to mental health and capacity?

Today is World Mental Health Day. This year’s theme is ‘making mental health and wellbeing for all a global priority’. This provides a welcome opportunity for STEP to reflect on how mental health impacts on the work of our 21,000 members in 96 countries.

Mental health and capacity is a key issue for our profession that we address in our report, Family Dialogues on the Responsible Stewardship of Wealth: A Guide.

It is a critical topic for those advising wealth and business-owning families. People are living significantly longer than they used to, and mental health and capacity issues are more common. Our report examines how advisors see the impact of family mental health and capacity in:


Does the person have the legal and mental capacity to make the decision? Different jurisdictions have relevant laws.

Are their mental state or circumstances taken into account to ensure they can participate in a valuable way? Can they use a proxy or attorney under a power of attorney to act for them?


Has the person been treated as a valuable member of the family, or have they been dismissed as less able to contribute? Is that fair? Sometimes it can be. A once-and-for-all decision is rarely the right way forward unless the person has a severe degenerative condition resulting in their losing mental capacity forever. Even then, their circumstances may change.

Have mental health issues, such as addiction, been enabled to keep the matter quiet, or as a perceived kindness, rather than facing the problem? Are advisors expected to act as a proxy for other family members?


Is the family’s ability to deal with the perception of weakness because of a mental health issue impaired by social mores or culture? How can that family be encouraged to broaden its thinking? Is that the role of the professional advisor? It is a sensitive question!

Legal steps

Has a qualified medical practitioner made a formal assessment of capacity or mental health? Is expert legal advice being taken in the most appropriate jurisdiction on financial aspects and on health and welfare aspects?

Dealing with ‘what-ifs’

What if a family member develops dementia before their children learn how to manage the family wealth? Is it responsible to only pass on assets to children at death, without equipping them to handle a successful transition?

Or is it more responsible to involve younger generations earlier? Discussing these matters within the family early on is critical to the responsible stewardship of wealth.

Questions to consider regarding mental health and capacity

• What is the professional advisor’s role in addressing the mental capacity and mental health/welfare of the family? Advisors should consider professional conflict and overstepping boundaries.
• As professional advisors, can we facilitate our clients’ realisation that mental capacity and mental health are important topics that may negatively impact their ability to preserve and be responsible stewards of family wealth?
• Can family leaders endorse resilience and openness to reduce the stigma and secrecy often associated with mental health and mental capacity issues?
• What is the role of trustees? How can they be assisted in their role and the discharge of their professional duties by other professional advisors?
• How can professional advisors get access to unbiased, helpful information about mental health?
• How do the structures families use for asset protection and succession planning help address risks associated with mental health and related issues?

Guiding wealth and business owners about responsible stewardship requires advisors who recognise that no one has all the answers. Sensitive and important issues, like mental health, capacity and others (as covered in the report) need to be addressed. An effective advisor can raise the right questions with families and help identify experts to help the family navigate complexity.

Simon Hodges, Director of Profession, STEP

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