Regulators are empowering financial advisors to protect their senior clients from financial abuse. A new regulation will require advisors to obtain a trusted contact person for each client’s account and will allow advisers to avoid any liability for delaying transactions when they have suspicions of fraud, abuse, or reduced cognitive ability. Some states are going further and enacting a uniform proposed law that would require transactions to be delayed when an adviser has suspicions.
Many state officials have come to the same conclusion. The North American Securities Administrators Association has developed a model act that has been winning the support of many state lawmakers for legislation that closely resembles FINRA’s rule.
The NASAA model act would require brokers and advisers to report instances of suspected elder abuse to state authorities, and would authorize them to delay disbursements of funds for up to 15 days if they believed their clients were being abused, conferring civil and administrative liability protections in those cases.