More than 20 states have passed laws to protect advisors worried about violating privacy laws when they report suspected financial abuse of the elderly.

Without these new protections sweeping through the states, advisors, bankers and other financial managers would risk running afoul of laws that protect an account owner’s privacy when they report suspected abuse of an elderly person to a third party. The proposed laws are called “report and hold laws” because they allow advisors to report suspected abuse and put holds on accounts to prevent disbursement of funds.

Arizona recently enacted a law granting immunity to advisors who report suspected abuse, and New Jersey is considering a similar measure.

The landscape is changing so quickly—and the laws vary to such an extent—that the law firm of Bressler, Amery & Ross, which has offices in New York, New Jersey, Florida and Alabama, has developed an interactive map to help advisors and attorneys keep track of the laws in each state. The map can be accessed at

The state laws supplement the federal provisions enacted under the Senior Safe Act signed into law in May 2018. The law provides immunity from prosecution for financial advisors and others who report suspected financial abuse if they receive training on how to spot mental deterioration in clients and identify the suspect behavior of third parties.

Similarly, the Financial Industry Regulatory Authority in February 2018 enacted two rules to help protect broker-dealers. One provides immunity for B-Ds who report abuse or stop disbursements when they suspect wrongdoing; the other requires broker-dealers to ask clients if they want to supply the name of a trusted person who can be contacted when circumstances warrant it.

“Only in the last 15 years or so have financial industry regulators focused on the problems related to the aging of baby boomers who are now moving into retirement,” says Richard Szuch, a principal at Bressler, Amery & Ross who manages the firm’s Senior and Vulnerable Investor Group. “Previously, regulators focused on the usage of potentially misleading titles, such as ‘senior specialist,’ or on making sure that complex products were fully understood by retired investors. By 2010, the SEC, Finra, self-regulatory organizations and Congress began to focus on the issue of exploitation leading to the theft of client assets. Now, the legislative solution trend is accelerating and more states are beginning to act.”

States are stepping in with additional protections, although the laws can vary. Most state laws and Finra regulations enable firms to stop disbursements from accounts for a limited amount of time if they suspect misconduct. Some state laws and proposals require advisors to report suspect activity.

The Financial Services Institute has advocated on behalf of state proposals to protect seniors from financial abuse. Another layer of protection is provided by state adult protective services agencies. These organizations were created to act on cases involving physical abuse, but their mission has expanded to include senior financial abuse and exploitation, Szuch says.

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