On April 30, 2020, the Financial Industry Regulatory Authority (“FINRA”) celebrated the fifth anniversary of its Senior Help Line (the “Help Line”). The Help Line is a critical tool in FINRA’s initiative to combat financial exploitation of seniors and other vulnerable populations.
Since its inception in April 2015, the Help Line has helped over 18,000 seniors across all fifty states. With callers ranging in age from 17 to 102, the Help Line has allowed FINRA to make over 1,400 referrals to state, federal and international regulators, as well as over 200 referrals to state Adult Protective Services (“APS”), and assisted with the return of over $7 million to investors.
The Help Line remains an important tool in FINRA’s ongoing commitment to the protection of seniors. With the continuing rise of financial exploitation of seniors, tools such as the Help Line have offered a lifeline for seniors, family members, and investment professionals to report instances of financial elder abuse and exploitation.
Background on FINRA’s Senior Help Line
The Help Line provides a lifeline for seniors, family members, and investment professionals who suspect that they, or someone they know, is a victim of financial exploitation or abuse.
The FINRA staff responsible for administration of the Help Line are trained to answer questions regarding securities and investment services topics that span the industry, identify instances of possible financial exploitation for seniors, and escalate those cases to the proper authorities (e.g. the Securities and Exchange Commission [the “SEC”], Commodities and Futures Trading Commission [the “CFTC”], state regulators, APS, etc.).
Staff are also equipped to reach out to member firms to try and resolve issues directly, seek restitution in certain instances, conduct research, and connect callers with other resources. Lastly, Help Line staff also assist with communications and talking points for other FINRA staff regarding senior financial exploitation.
What Should I Consider When Evaluating My Policies and Procedures for Senior Financial Exploitation?
Unfortunately, the financial exploitation of seniors and other vulnerable adults continues to increase, and in light of current challenges related to COVID-19, seniors and other vulnerable populations will only continue to be targets of financial exploitation.
In light of these circumstances, it is important for investment advisers (“IAs”) and broker-dealers (“BDs”) to review their policies and procedures (“P&Ps”) addressing senior financial exploitation and abuse.
For BDs, their P&Ps should follow FINRA Rule 2165(c)(1)-(2) (Financial Exploitation of Specified Adults). Additionally, FINRA has found that BDs that incorporated suitability considerations for seniors, escalation policies and procedures, training on identifying financial exploitation and diminished capacity red flags, the creation of teams within the BD or the BD’s compliance department focused on senior issues, and internal awards for recognition of outstanding service to seniors, are better equipped to address instances of senior financial exploitation.
For IAs, their P&Ps should contemplate policies and procedures specifically focused on: services for senior clients that are customized to their business model and products; retiree accounts; policies, procedures, and training for identification of financial exploitation and diminished capacity red flags; trusted contacts; and continuing education for investment adviser representatives (“IARs”) and staff on trends and issues observed in the industry.
Lastly, BDs and IAs should review the Senior Safe Act’s (“SSA”) safe harbor requirements to determine if additional policies and procedures are necessary in order for their IARs, registered representatives, supervisors, and certain compliance and legal personnel to receive training on how to act in good faith and apply reasonable care when reporting instances of alleged financial exploitation of senior clients. This is especially important in order for those individuals, and their firms, to receive immunity from criminal and civil liability under the SSA.
To read more about the Senior Safe Act in relationship to IAs and BDs, please click here.
How Can You Help Me with My Senior Financial Exploitation Policies and Procedures?
Jacko Law Group can help your firm with evaluating and revising your firm’s P&Ps concerning senior financial exploitation and provide guidance on how best to adhere to FINRA’s rule on Financial Exploitation of Specified Adults, SEC guidelines on senior investors and financial exploitation, and the SSA. Our team of attorneys will use our extensive experience to ask detailed questions designed to determine if your senior financial exploitation program is thorough, accurate, and up-to-date.
 DeSouza, Andrew, and Michelle Ong. “FINRA Securities Helpline for Seniors Marks Five-Year Anniversary.” FINRA Securities Helpline for Seniors Marks Five-Year Anniversary | FINRA.org, FINRA, 30 Apr. 2020, www.finra.org/media-center/newsreleases/2020/finra-securities-helpline-seniors-marks-five-year-anniversary.