Quentara Costa is looking forward to the day that she is enabled legally to put a client’s transaction on hold and contact authorities in the event there’s financial activity that’s suspicious in nature. Currently, a signed authorization to release information allows her to talk with hired professionals and family members of clients over 65 years old showing signs of cognitive decline, but it’s often not enough to stop elder abuse.
“Having the fiduciary authority to oversee and ensure that a client’s family member is acting appropriately and in the best interest of the client is very important for advisors to have in place,” said Quentara, CFP, whose firm is based in North Andover, Mass.
That’s because family dynamics can change over time.
“The person you named 10 years ago to be your power of attorney isn't necessarily the correct fit for today and could be the wrong decision when a person reaches 65 years old,” said Quentara. “In some cases, the senior doesn’t have a trustworthy family member or friend who actually cares, which leaves me nowhere to go with any concerns.”
Come February 5, financial advisors nationwide who are members of Finra will be required make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account.
The SEC approved the amendment to Finra Rule 4512 called Customer Account Information last year.
“If there's an emergency and we can't get a hold of the client, if we're worried about the client's capacity or we're worried that the client might be subject to potential fraud or exploitation, that's when we'll reach out to the trusted contact,” said John Ellis, principal in the compliance division of Edward Jones.
The Alternate Contact Authorization form currently in use at Edward Jones will be phased out once the Finra Trusted Contact Rule goes into effect.
“At that point, we will ask each new client if they’d like to provide us with a trust contact and we will capture the response in our operating system,” Ellis said. “The client will no longer have anything to sign because no document will be generated.”
Edward Jones has been intentional about the issue since 2014 as a way to protect older adults.