The Ontario Securities Commission recently published research findings focused on improving investment advisory client participation in designating a trusted emergency contact (referred to in the report as a “trusted contact person” or “TCP”). Although designating a trusted emergency contact is an important tool for investment advisers to protect a senior or vulnerable client’s investments against financial exploitation or losses due to diminished capacity, many clients decline to do so. This new report aims to help investment advisers and broker dealers utilize behavioral science to encourage its senior and vulnerable clients to name a trusted emergency contact. Despite having an intended audience in Canada, the report highlights a number of useful insights and strategies that can be implemented by investment advisers across the United States. To read the full report, click here.
On May 18, 2021, South Carolina enacted new legislation intended to help investment advisers and broker-dealers protect clients who are vulnerable adults (such as seniors with diminished capacity) from financial exploitation. Similar to financial exploitation laws adopted by other states, South Carolina’s new law permits state registered investment advisers and broker-dealers to delay disbursements and transactions under specified, limited circumstances for a vulnerable client who is an “eligible adult” as defined by the statute. In addition, a registered investment adviser firm may contact other third parties previously designated by the vulnerable client, such as a trusted emergency contact, regarding the suspected financial exploitation. Firms are also permitted to report suspected financial exploitation to South Carolina’s Adult Protective Services and Securities Division on a voluntary basis. In the event that an investment adviser firm delays a transaction or disbursement, reporting to the specified agencies is mandatory. Click here to read South Carolina’s new financial exploitation law.
Nebraska Enacts Law Giving Investment Advisers Ability to Protect Seniors and Vulnerable Adults from Financial Exploitation
April 10, 2021
The North American Securities Administrators Association, Inc. (“NASAA”) recently released a white paper detailing the results of a study conducted by its Senior Issues/Diminished Capacity Committee. While many investment adviser firms are increasingly aware of issues related to diminished capacity in clients, NASAA has found that not all registered investment advisers are prepared to identify and address diminished capacity among investment adviser representatives. As part of the study, NASAA surveyed a number of financial institutions and industry professionals including Bryan Hill, President of RIA Compliance Consultants, Inc.
June 12, 2020
June 15 is World Elder Abuse Awareness Day (WEAAD). WEAAD was launched by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. The purpose of WEAAD is to provide an opportunity for communities around the world to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect.
January 25, 2020
Last week, RIA Compliance Consultants hosted a webinar entitled “How to Report Elder Abuse to Adult Protective Services” in which a state securities regulator and an official from a state’s adult protective services agency discussed how an investment adviser firm can more effectively report elder abuse and better protect its senior and vulnerable clients.
Learn How Your Investment Adviser Can Improve Its Report of Elder Abuse to Adult Protective Services
January 20, 2020
Many state legislatures in the U.S. have recently passed legislation mandating that investment adviser firms and their supervised persons report instances of elder abuse by third parties to the applicable authority in the state (e.g., adult protective service, attorney general’s office). Moreover, many securities regulators have passed specific rules requiring mandatory reporting of elder abuse and/or taken the position that reporting instances of elder abuse is essentially part of an investment adviser firm’s fiduciary duty to act in a client’s best interest.
RIA Compliance Consultants is offering two investment advisor compliance webinars in January. On Thursday, January 16, 2020, Bryan Hill, the president of RCC hosted, “SEC’s 2020 Exam Priorities for Investment Advisers,” A recording of this one our webinar can be purchased through the following link “SEC’s 2020 Exam Priorities for Investment Advisers”.
November 28, 2019
When an investment adviser firm suspects a vulnerable or senior client is being exploited financially by a third-party, one of the biggest challenges for the chief compliance officer (“CCO”) is knowing where exactly to report such suspicions of abuse.
Is Your Investment Adviser Subject to Mandatory Reporting of Financial Exploitation of Senior Clients?
July 17, 2018
Recently, there has been a wave of legislation and regulatory action focused on senior investor protections. The U.S. Congress just passed the Senior Safe Act, a law which provides legal immunity to an investment adviser, if the investment adviser meets certain requirements, for the act of reporting suspected senior financial exploitation. Both the U.S. Securities and Exchange Commission (“SEC”) and FINRA have had a senior investor exam initiative going on since 2014. In addition, almost every state has a law pertaining to senior exploitation.