Protecting Your Senior Clients: Compliance in Advance of the February 5 FINRA Deadline . . . and Beyond

November 6, 2017

Patricia  Solfaro

Publication
Bloomberg Law

Patricia Solfaro



It is projected that the number of Americans 65 years of age or older will double to 71.5 million by 2030. Moreover, the Baby Boomer generation is expected to control over 70% of the nation’s disposable income within the next five years and stands to inherit an additional $15 trillion. Baby Boomers will therefore transfer approximately $30 trillion in wealth to the next generation. Given these astonishing numbers, it is no surprise that regulators, industry groups, and financial firms alike have made the protection of senior investors a focal point.
 
Earlier this year, the Securities and Exchange Commission approved the following proposed Financial Industry Regulatory Authority rule changes regarding the financial exploitation of seniors:
 
  1. Amendments to FINRA Rule 4512 (Customer Account Information) to require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account; and
  2. The adoption of new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers.
Rule 2165 and the amendments to Rule 4512 become effective February 5, 2018. These new rules will allow members to more quickly and effectively address suspected financial exploitation of seniors and other specified adults.

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