As the baby boomer generation reaches retirement age, regulators have increased their focus on protecting senior investors. A new study released by the FINRA Investor Education Foundation (FINRA Foundation), in collaboration with researchers from Duke University and Rush University Medical Center suggests that overconfidence in financial knowledge may lead to excessive risk taking among older investors. This is a good time for your firm to sit down and review your accounts held by elderly clients and determine if their portfolio and investment strategy actually fits their needs.
FINRA Rule 3310 provides broker-dealer guidance on how to design, test, and enforce a firm’s Anti-Money Laundering Program (“AML”). One main element of AML is to “establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of transactions required under 31 U.S.C. 5318(g) and the implementing regulations thereunder.” FINRA Notice to Members 19-10 identified a key list of red flags that may be used to help identify suspicious activity in trading, money movements, insurance, and securities.