Protecting Seniors and Other Vulnerable Adults from Financial Exploitation

FINRA rules protect certain investors from caregivers or family members who might try to exploit their assets held by a broker-dealer.

These rules apply both to senior investors and any adult with a physical or mental impairment that renders him unable to protect his own interests.

Member firms must make reasonable efforts to obtain the name and contact information for a trusted contact person upon opening a customer's account. Then, if the firm ever suspects that financial exploitation could be occurring, they will notify the customer's trusted contact. Although firms are not required to spot potential exploitation and prevent it, they will be granted safe harbor for putting a temporary hold on an account if they suspect financial exploitation is going on.

As their website explains, "On April 20, 2015, FINRA launched a toll-free senior hotline — 1-844-57-HELPS — to provide older investors with a supportive place to get assistance from knowledgeable FINRA staff related to concerns they have with their brokerage accounts and investments. To date, FINRA has received over 1500 calls on issues including how to find information on their brokers, calls from children of deceased parents trying to locate assets or having difficulty moving assets from a brokerage firm, concerns from seniors ranging from routine poor service complaints to routine sales practice issues at firms, and fraud raised by a senior and/or child on behalf of senior investors."


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