I do not want to write about this…
Senior abuse is deplorable and sad. One in Ten older Americans is abused each year. One in fourteen instances gets reported to authorities.*
Sadder still is the fact that almost 60% of elder abuse is perpetrated by a trusted person, most often, adult children or spouses. And you might have correctly guessed that elders suffering from dementia are the most susceptible to abuse and the least likely to report it. Several studies conducted between 2009-2010 suggest that an incident rate of around 50% for seniors with some form of cognitive impairment.*
Definitions of senior abuse abound, so do examples, the web-links provide ample descriptions of not only how to spot abuse but also how to prevent it. Here are two definitions I like, the first is very general, the second applies directly to our roles as planners and financial advisors:
- The Centers for Disease Control and Prevention (CDC): “intentional act or failure to act by a caregiver or another person in a relationship involving an expectation of trust that causes or creates a serious risk of harm to an older adult.”
- The Securities and Exchange Commission (SEC) approved the adoption by the Financial Industry Regulatory Agency (FINRA) of the following: “ Specifically, financial exploitation would include: (A) the wrongful or unauthorized taking, withholding, appropriation, or use of a specified adult’s funds or securities; or (B) any act or omission taken by a person, including through the use of a power of attorney, guardianship, or any other authority, regarding a specified adult, to: (i) obtain control, through deception, intimidation or undue influence, over the specified adult’s money, assets or property; or (ii) convert the specified adult’s money, assets or property.”
Effective February 5, 2018, onward, our business and you will be affected by two new FINRA rules: Rule 2165 (Financial Exploitation of Specified Adults) and an amendment to Rule 4512 (Customer Account Information).
Why are these rules important?
They protect the client: “provide members with a way under FINRA rules to respond to situations in which they have a reasonable basis to believe that financial exploitation has occurred, is occurring, has been attempted or will be attempted. Members can better protect their customers from financial exploitation if they have the ability to contact a customer’s designated trusted contact person and, when appropriate, place a temporary hold on a disbursement of funds or securities from a customer’s account.”*
#2165: We are permitted to place on hold requests for funds: “a member that reasonably believes that financial exploitation has occurred, is occurring, has been attempted or will be attempted to place a temporary hold on the disbursement of funds or securities from the account of a “specified adult” customer.”* And…
#4512: We need the name and contact information of a trusted person to talk to in case we need to intervene:“ require members to make reasonable efforts to obtain the name of ad contact information for a trusted contact person(s) upon the opening of a non-institutional customer’s account or when updating account information for a noninstitutional account in existence prior to the effective date of the amendments (existing account).”*
You should, by now dear reader be asking: So who’s a designated trusted contact and what can we discuss with them, what’s our role? In some cases, a designated contact should not be a spouse, caregiver, or offspring. You may also want to exclude those folks which you have given Power of Attorney (POA).
Our role is simple: To protect the client. A “Trusted Contact” is a person we go to when we reasonably believe the client is susceptible to abuse or diminished capacity. We are not allowed, however, to discuss our client’s financial information. The intent, in our opinion, is to intercede on behalf of the client’ well-being, not to take nor provide financial advice to a third party, regarding our client’s finances.
Our group is also required to report to the State of Georgia abuse, neglect or exploitation if we have a reasonable cause to believe the client is at risk. The list encompassing senior abuse is extensive please refer to the link below.**
Looking out for our clients, we believe, is our obligation: As is reflected on our website – “We are dedicated to making things better every day for clients, families, and communities around Gainesville, North Georgia and beyond.
Our portfolios favor Domestic and Foreign Equities: our cash position has decreased in recent weeks.
Carlos Dominguez – Portfolio Manager, RJ
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