The US Financial Industry Regulatory Authority (FINRA) has issued a new set of rules to clamp down on the growing problem of elder financial abuse. The agency's Board of Governors approved a proposal that enables financial services companies to place a temporary hold on the disbursement of funds from client accounts if there is the reasonable suspicion of exploitation. Richard Ketchum, FINRA's Chief Executive Officer and Chairman, remarked that FINRA's enactment of the new policy would help protect seniors from fraud, undue influence, and other damage wrought through elder financial abuse.
Each day for the next 15 years, an average of 10,000 Americans will turn 65. Seniors are at risk, and FINRA is committed to helping protect seniors and other vulnerable adults from financial exploitation. This proposal is an important step forward that would benefit both investors and firms.
FINRA's new rule is crafted as an option for financial and investment planners rather than a mandatory duty. If a financial professional is concerned that an ill-intentioned third party is seeking access to a senior (65 years and older) client's account, they can put a temporary hold on the transaction and seek to clarify the matter. In addition, firms will be required to undertake "reasonable efforts" to obtain the name and telephone number for a trusted contact in case suspicious circumstances arise. Companies will also be legally shielded from liability for the holds, since such actions are to be taken in good faith for the benefit of the client and the service provider.
New policies to help protect seniors from elder financial abuse couldn't come soon enough, so FINRA's initiative is certainly welcome in light of continuing exploitation. For every story of elder abuse you see in the news, there might be a dozen cases that are never uncovered. Every year our communities are robbed of anywhere from three to thirty-six billion dollars due to this crime, and those figures are only set to increase as America's elderly population keeps rising. Not only financial professionals can play a part in stopping elder abuse - we all can act to protect our loved ones and neighbors, so let's get to work.