Unfortunately, scammers know that they can take advantage of the elderly more frequently than young folks. Because seniors are sometimes less familiar with modern technology, have access to more money, and may have age-related physical and or cognitive deterioration, they are often the target of financial scammers. So how do we help our elderly family and friends avoid getting financially scammed? 

As financial advisers, the good news is that we know our clients so well that we can prevent that from happening. For example, if one of our clients calls and asks to have an exorbitant amount of money transferred to her bank account, like $50,000, and we have not discussed this prior, this would raise red flags for us. Our protocol is to follow up with our client and ask questions; sometimes clients will then become vague about why they need to withdraw money. Typically, this vagueness is another reason we become concerned: we think our client may be getting scammed. 

The issue now is that we cannot speak to anyone in our client’s family about her financial choices: our clients’ privacy is extremely important to us – morally, ethically, and legally. So how do we help our clients who are victims of financial fraud? 

As her financial planner, how can I help our client? In 2018, congress and the Financial Industry Regulatory Authority provided some tools to help protect seniors from financial fraud. FINRA’s “trusted contact” rule allows owners of investment accounts to designate someone who can be contacted if the advisor believes suspicious activity has occurred. This “trusted contact” does not have authority to get account details or withdraw funds. However, the advisor would have the authority to contact the designated trusted contact and let them know of the suspicious activity.

FINRA also has a “temporary hold” rule, which would allow us to place a hold on disbursements from accounts for up to 15 days in case the request seems suspicious. This rule only applies to investors 65 years or older, or those who have mental or physical impairments. 

As caring and trustworthy financial planners, we strongly suggest that all account holders, especially those over 65, have a “trusted contact” added to your investment accounts. We will be glad to help and answer any questions about the FINRA “trusted contact” and “temporary hold” rules. At Keel and Long, we use our combined experience of nearly 20 years to help you reach your financial goals. We specialize in portfolio management, 401k plan services, and financial planning in general. If you have questions about financial scams, or if you’re ready to set up your financial future with us, contact us as soon as possible. We’re ready to help!