Firm News

Wells Fargo just released its Elder Needs Survey which may explain why senior investors are so susceptible to financial exploitation -- seniors simply see no sense of urgency about the topic or they have a hard time speaking about it with their loved ones. The survey also found that, when seniors do consider the risk of exploitation, they are more worried about fraud committed by strangers as opposed to family members and close trusted persons. Both findings spell trouble for efforts by regulators and financial services firms, who share the goal of minimizing the exploitation of seniors and vulnerable investors.

In a summary describing its findings, Wells Fargo stated, “Although nearly half of older Americans (48 percent) say there are family members they would not trust with their money, 68 percent say strangers are the most likely perpetrator of financial exploitation, followed by hired help (24 percent). Fewer than one in ten (9 percent) say that family members are the most likely perpetrators, despite family members being among the most common perpetrators [citing National Adult Protective Services data].”

One has to be careful about drawing broad conclusions from the survey as it was based on interviews with 784 investors, age 60 or older, with “at least $25,000” in investible assets. With an asset level that low, this group of investors may not feel the sense of urgency that others might have with more at stake.

Amended FINRA Rule 4512 now requires firms to “make reasonable efforts” to obtain the name and contact information of a “trusted contact person” (designated by the client) when opening a new account. That trusted contact acts as a resource for firms if the need arises to make contact in cases of suspected financial exploitation. New FINRA Rule 2165 permits (but does not require) firms to place a temporary hold on disbursements from client accounts when they have a reasonable belief that financial exploitation has occurred/is occurring or has been/will be attempted.

The regulators have clearly indicated their expectation that firms need to be able to move more quickly in case of suspected fraud and must put in place better controls to avert senior/vulnerable investor financial exploitation.

For the survey, please visit:

For the press release, please visit:

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