Financial Capacity Instrument

The Financial Capacity Instrument (FCI) is a conceptually based, standardized psychometric instrument designed to directly assess everyday financial activities and abilities relevant to community-dwelling adults. The FCI assesses financial skills at the task, domain, and global levels. The current version of the FCI (FCI-9) consists of 20 financial tasks, 9 domains of financial activity, and 2 global levels. The FCI is a reliable and valid measure of financial capacity that discriminates well between cognitively intact older adults and persons with mild and moderate Alzheimer’s disease (AD). The FCI has also proven sensitive to identifying subtler changes in the financial abilities of individuals with mild cognitive impairment (MCI). In addition to older adults with dementia, the FCI has application to other patient groups with acquired cognitive and functional impairment, including patients with multiple scleroses, stroke, and traumatic brain injury. It is an instrument that has application in both clinical and forensic contexts.

Conceptualization and Development of the FCI

There continues to be a pressing need for conceptually based, standardized assessment instruments specific to the construct of financial capacity. The FCI was developed to help fill this need. The FCI is based on a three-level conceptual model that analyzes financial capacity at the task, domain, and global levels. Specifically, this model examines (a) financial abilities (or tasks), such as counting coins/currency, using a vending machine, or preparing bills for mailing; (b) broader domains of financial activity relevant to independent function in the community, such as conducting cash transactions, checkbook management, or financial judgment; and (c) global measures of overall financial capacity.

The original FCI (FCI-6) consisted of 14 specific tasks that assessed six domains of financial activity, including basic monetary skills (D1), financial conceptual knowledge (D2), cash transactions (D3), checkbook management (D4), bank statement management (D5), and financial judgment (D6). The FCI was revised in 2001 to include eight separate domains and 19 standardized, quantifiable behavioral tasks (FCI-8). New domains assessed bill payment (D7) and knowledge of personal assets and estate arrangements (D8). An index of overall financial capacity was also introduced. The FCI was last modified in 2003 (FCI-9). Tasks pertaining to the detection and avoidance of telephone and mail fraud remained under the domain of financial judgment (D6). Investment decision making, which was included as part of D6 in earlier versions of the FCI, was accorded its own domain (D9).

Administration and Scoring of the FCI

Financial abilities and experience can vary substantially across individuals. It is important to identify an individual’s prior level of financial skill and experience before administering the FCI or any other financial capacity instrument. For example, it would be misleading to test for checkbook management skills in a person who has never used a checkbook. An instrument for assessing prior financial experience is the Prior Financial Capacity Form. This rating form is completed by both patients and informants and assesses whether an individual could previously perform designated financial tasks and activities (a) independently, (b) only with assistance, or (c) not even with assistance.

FCI tasks are administered serially by domain. A system of prompts and recognition format questions is included to allow partial credit for persons with amnesia or aphasia.

Task-, domain-, and global-level performance scores are obtained using a detailed and standardized scoring system. Performance scores for each domain are obtained by summing task scores within that domain. Performance scores at the global level (overall financial capacity) are obtained by summing domain scores.

FCI performance scores can also be converted into capacity outcomes (capable, marginally capable, or incapable) using psychometric cut scores derived from normal control performance. These capacity outcomes are to be interpreted cautiously, as they are based on psychometric cut scores and are not equivalent to clinically or legally determined capacity judgments. However, the outcomes serve as a useful additional perspective for understanding performance on the FCI.

Reliability and Validity of the FCI

The original FCI-6 demonstrated adequate to excellent internal, test-retest, and inter-rater reliabilities at task and domain levels using small samples of older adult controls and AD patients. Very good to excellent reliabilities were obtained for the FCI-8 at the domain level. At the task level, the FCI-8 demonstrated excellent inter-rater reliability but mixed internal and test-retest reliability. This probably reflected item reductions within tasks and reduced task range.

All versions of the FCI arguably have strong face and content validity. The FCI tasks and domains represent simple and complex financial abilities and activities that are commonly performed by older adults in the community. The FCI structure and contents were reviewed and approved by a panel of physicians, gerontologists, an attorney, and a judge with considerable knowledge of the financial capacity construct.

The FCI has also demonstrated construct validity. FCI domains and tasks have been found to discriminate well the performance of cognitively intact older adults from that of patients with mild to moderate AD and patients with amnestic MCI. In addition, impaired domain-level performance in MCI and AD has been correlated with deficits in cognitive functions of semantic memory, working memory, simple attention, and executive function. In the continuing absence of a clear criterion measure for assessing financial capacity, this research provides initial support for the construct validity of the FCI.

Future Research

Preliminary research on the reliability and validity of the FCI is promising. Its direct, standardized, and quantified approach to assessing financial abilities and activities represents a new and significant contribution to the area of functional capacity assessment. However, initial studies using the FCI have been limited to relatively small samples of cognitively intact older adults and persons with MCI and AD. No research has been conducted to date that examines financial performance among other populations, such as persons with serious mental illness. Therefore, studies with larger and more heterogeneous control and clinical samples are needed. Future validation studies should compare FCI results with the judgment of experienced clinicians based on clinical interviews.

References:

1. Earnst, K., Wadley, V., Aldridge, T., Steenwyk, A., Hammond, A., Harrell, L., et al. (2001). Loss of financial capacity in Alzheimer’s disease: The role of working memory. Aging, Neuropsychology, and Cognition, 8, 109-119.
2. Griffith, H. R., Belue, K., Sicola, A., Krzywanski, S., Zamrini, E., Harrell, L. E., et al. (2003). Impaired financial abilities in mild cognitive impairment: A direct assessment approach. Neurology, 60, 449-157.
3. Marson, D. C., Sawrie, S. M., Snyder, S., Mclnturff, B., Stalvey, T., Boothe, A., et al. (2000). Assessing financial capacity in patients with Alzheimer’s disease: A conceptual model and prototype instrument. Archives of Neurology, 57, 877-884.
4. Note: The FCI is owned by the UAB Research Foundation (UABRF) and is currently available as an instrument for clinical research. A commercial version of the FCI will be made available by the UABRF in late 2007 or 2008.

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