Last July the House of Representatives passed a bill that would make it easier for financial advisors to report elder financial abuse. The Senior$afe Act of 2016 would better enable concerned financial advisors and firms to report signs of possible elder financial abuse to federal or state securities regulators, law enforcement and other covered agencies without fear of being held liable for violating federal privacy laws. It proposes to help advisors receive the standardized training they need to spot signs of potential financial exploitation.
The Board of Trustees of the National Association of Insurance and Financial Advisors (NAIFA) recently approved policies that will proactively support the Senior$afe Act. Briefly, the policies include:
- If there is attempted fraud on a client, the advisor would report the matter to the firm who could then alert the appropriate state authorities. This report would then be able to delay a suspicious transaction request and give the firm’s legal and compliance personnel the time to review the transaction.
- Advisors and firms should be encouraged to report potentially fraudulent transactions and so create a legal “safe harbor” provision with immunity from privacy law violations.
- The state insurance department would provide training resources to.
- Provisions that clearly state that advisors are not medical professionals and would not be held responsible for determining a client’s cognitive condition.
See: NAIFA article