Every year, millions of seniors become victims of financial exploitation, resulting in billions of dollars in personal losses. A frequent target of scammers, older Americans also often endure financial pressure from caregivers or family members, some of whom take advantage of trusting relationships for personal gain.
Protection of senior investors has always been a top priority for the Financial Industry Regulatory Authority (FINRA) and is the focus of several rules intended to thwart financial exploitation. These rules, which are the first uniform, national standards to protect senior investors, allow brokerage firms to take steps to protect seniors and other specified adults. Some states have adopted similar rules as well.
ADDING A TRUSTED CONTACT PERSON TO YOUR ACCOUNT
When you open a brokerage account or update information related to an existing account, a FINRA rule requires your brokerage firm to make reasonable efforts to obtain the name and contact information for a designated trusted contact person for the account. Among other things, adding a trusted contact person to your account puts your brokerage firm in a better position to keep your account safe.
While you are not required to provide this information to open an account, it may be a good idea to do so. By choosing to provide this information, you are authorizing the firm to contact someone you trust and to disclose information about your account only in certain circumstances, including to address possible financial exploitation and to confirm the specifics of your current contact information, health status or the identity of any legal guardian, executor, trustee or holder of a power of attorney. You will receive a written disclosure from the firm that lays out these details.