FINRA Approves Rule to Help Prevent Elder Abuse

In an effort to help protect seniors and other vulnerable investors, Financial Industry Regulatory Authority’s (FINRA) board has approved a new rule that would allow advisors to temporarily block transactions when they suspect the client is being exploited. Rules on trade execution and cash withdrawals have prevented advisors from stopping transactions when they suspect fraud or financial abuse, according to the Journal. FINRA’s new rule, approved by its board and expected to open up for a one- to two-month comment period in the next several weeks, would allow advisors who suspect exploitation to put temporary holds on transactions of clients 65 and over as well as customers 18 and over with mental or physical impairments, reports the publication. Separately, at least three states — Delaware, Washington and Missouri — have already passed laws that protect advisors from liability arising from blocking transactions on suspicions of fraud or abuse of elderly clients, notes the paper. The regulator also proposes requiring firms to obtain contact information for a trusted person when opening new accounts, says the Journal. The publication adds that FINRA’s efforts to prevent elder abuse have included setting up a hotline earlier this year for older investors, which has resulted in more than 1,500 calls covering questions about finding information on advisors, complaints about service, and concerns of financial exploitation.

Source/more: Financial Advisor IQ

David Wingate is an elder law attorney at the Elder Law Office of David Wingate, LLC. The elder law office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick and Montgomery Counties, Maryland.