Jan 16, 2016 | aging, aging investor, elder investor, elderly, finra, investor, NASAA, SEC, senior investor
“Regulatory Changes Advisors Must Face With Your Aging Clients”
Summary of course:
Update on what the SEC, FINRA an NASAA have in mind for financial professionals across the country in how they do business with clients over age 65. Review of the research these agencies have done, Model Rules regulators have created and what exemplary things they found firms and organizations doing for aging clients. They all want financial professionals to be more protective of aging investors. They envision mandates for reporting financial abuse of elders will and expand mandates into other areas. This course highlights areas regulators expect advisors to address, such as training in senior issues and increased communication with aging clients. It provides specifics on how to get ready for what the regulators want so that you will not have to scramble to comply with mandates.
Learning Objectives:
- Understand the regulators’ concept of a “senior program” and how you can create one.
- Know the Model Rules about financial abuse the regulators have already publicly posted.
- Know what other firms across the US are doing about aging investors that you should be doing too.
- Know what action steps you can and should take now to be ready for mandates.
Nov 24, 2015 | finances for elders, financial capacity, finra, NASAA, SEC, senior citizen investor, senior investor, seniors finances
FINRA, together with the SEC and NASAA are on a joint mission to keep seniors and impaired adults from being financially abused. FINRA has proposed new rules that will allow a firm to put a temporary hold on financial transactions when abuse is suspected, and will allow the firm to contact a trusted other during this hold period.
Where’s the flaw? No rule yet mandates that every financial firm and every individual advisor obtain information for a trusted contact person for every client. Not only should this be required for all new accounts, it should be mandated that such trusted others be identified for every client over age 65. As the risk of dementia doubles approximately every five years after age 65, the reasons for the advisor to have someone to call when concerns arise is obvious.
As to the subject of the trusted other, the elder usually names an adult son or daughter as the trusted one. Sometimes that is all the information the advisor has. At the same time, the studies on elder financial abuse show us that family members are the most frequent abusers. Do you see the contradiction here? Every advisor should be required to obtain not only one “trusted person” but two or three so that if abuse is going on or seems to be a threat, the advisor can involve more than one person in the effort to stop it.
Another flaw in the proposed rule is that is it assumed that something helpful will occur during the hold period when the institution is excused from liability for not acting. But there is no clear evidence that either advisors or institutions are being trained to spot financial abuse warning signs before the money is all drained from the account. As we see it, the proposed rule focuses on doing something after abuse is clear and the institution has “a reasonable belief” that financial abuse is occurring. We think the industry can do much better than reacting by being required to call someone after the client has been taken advantage of or had the portfolio plundered.
Here’s the truth: getting an unwilling aging person to step down from financial authority over his portfolio takes more than a few days or a couple of weeks. If there is a trust in place and the elder is the trustee, the terms often state that at least one doctor, or two must say that the client is no longer capable of handling financial matters. Getting a doctor or two to see the client, do an assessment and produce something in writing with the needed findings can take months. And we’ve witnessed this exact scenario when it did take three months to oust the impaired, demented senior who wanted to give his predatory adult child a debit card for his cash management account.
At AgingInvestor.com, where we educate both financial institutions and independent advisors about stopping financial abuse, we think the effort to keep elders financially safer needs to go to the front end of abuse, not the back end after it has happened. Proactive steps can be taken. We urge every financial professional to know the warning signs of diminished capacity so you can engage the trusted third party when the signs emerge, rather than waiting until someone, whether family or outside predator seizes the opportunity to exploit diminished capacity.
To learn more about what you or your institution can do that we think is much better than simply being allowed to hold transactions for a bit when you believe abuse is going on, contact us at AgingInvestor.com. We have an entire program outline ready for you with focus on prevention.
If your client is being manipulated, holding transactions when you’re pretty sure it’s gone on can do little to protect your client. The predators and thieves can empty an account faster than it would take you to fill out the forms FINRA will inevitably give you. Think the way you are trained to think about finances generally: plan ahead, anticipate problems before they get here, and take protective action.
Carolyn Rosenblatt, RN, Elder Law Attorney, Founder AgingInvestor.com
Jun 18, 2015 | aging, elderly, finances for elders, financial elder abuse, senior investor
The gripping thing about this case is not just the horrific means used to steal money. It’s the shocking failure of every person involved to ever notice that over a 6 year period, a caretaker isolated, abused and stole millions from a 74 year old, helpless stroke victim.
Li Ching Lu was convicted of financial abuse via fraud and forgery in Long Beach, this month. She got 4 years in state prison, which seems appallingly short for what she did. Over a period between 2002 and 2010, she emptied her victim’s bank accounts by writing checks and depositing them in 63 different accounts at 4 different banks.
Why didn’t anyone notice that she began to isolate her victim from her friends, family, financial advisors? Did any of them care enough to check on their friend or client? Did the cessation of contact from a person who had amassed a small fortune from investments ever alarm the investment advisors on her team enough to find out why? (more…)
