Senior Investors: Protecting the Client

Today, investment advisers and broker-dealers face many challenges when providing advice to and working for senior investors. Many seniors are living with or approaching diminished capacity due to Alzheimer’s, dementia, and/or other health-related issues. Unfortunately, these health issues create vulnerability for financial exploitation from caregivers, family members, neighbors, friends, medical professionals, lawyers, clergy, bank employees, or financial service professionals.

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The Senior Safe Act

The Senior Safe Act: “Immunity” with Conditions

On May 23, 2019, the SEC, NASAA, and FINRA published a year-end review of the Senior Safe Act which became federal law one year ago. In doing so, they also issued a Fact Sheet to help raise awareness with financial institutions and describe how the Act’s immunity provisions work.

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Financial Exploitation of Seniors

FINRA has announced new rules relating to the financial exploitation of seniors and other specified adults.  On February 5, 2018, the amendments to Rule 4512 and new Rule 2165 become effective. FINRA Rule 4512 FINRA Rule 4512 will require members to make reasonable efforts to collect the name and contact information of a trusted contact[…]

SEC Approves Rules Relating to Financial Exploitation of Senior Investors (Rule 2165 and Rule 4512)

FINRA has recently announced the SEC approval of new Rule 2165 and amendments to FINRA Rule 4512 to address a longstanding problem within the securities industry: the financial exploitation of senior investors. “These rules will provide firms with tools to respond more quickly and effectively to protect seniors from financial exploitation. This project included input and support from both investor groups and industry representatives and it demonstrates a shared commitment to an important, common goal – protecting senior investors,” said Robert W. Cook, FINRA President and CEO.  Read More…

Financial Exploitation of Specified Adults

FINRA recently filed proposed new regulations regarding broker-dealer compliance with the SEC to: (1) amend FINRA Rule 4512 (Customer Account Information) to require member firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account; and (2) adopt new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit FINRA registered broker-dealers to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers.

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