Senior Investors Should Add a “Trusted Contact Person” to Their Investment Accounts

By Chad M. Kohler, Esq.

In my law practice over the years, I’ve represented numerous senior investors who were the victims of elder financial abuse. In many cases, the fraud may have been detected much earlier if the investor had filled out paperwork with their brokerage firm adding a “trusted contact person” on their investment accounts. All investors, but particularly seniors, should consider adding a trusted contact person on their accounts.

Earlier this month, the Securities & Exchange Commission’s (SEC) Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) issued an Investor Bulletin urging investors to take this important step to protect their investment accounts from fraud or other misconduct.

As the Bulletin explains, a trusted contact person is a person who you authorize your brokerage firm to contact in limited circumstances. Importantly, a trusted contact person is not authorized to make investment decisions on your behalf or direct the purchase or sale of securities in your accounts. However, a trusted contact person can play a critical role in making sure that your accounts are protected.

For example, if your broker has trouble reaching you, a trusted contact person can confirm that your information on file is up to date. Likewise, your financial advisor may notice unusual fund transfers out of your account or other suspicious activity, and a trusted contact person may help respond to concerns about possible financial exploitation.

The same goes for health issues: adding a trusted contact person may help confirm your current health status. And, adding a trusted contact person to your accounts may help confirm the identity of any legal guardian, executor, trustee, or power of attorney on your accounts.

Adding a trusted contact person is easy – you simply fill out and sign a form provided to you by your brokerage firm.

Taking the simple step of adding a trusted contact person to your accounts may help you keep your life savings protected.