FINRA Rule 2165, known officially as the “Financial Exploitation of Specified Adults” but known commonly as the “Financial Exploitation of Seniors Act”, goes into effect February 5, 2018.
Here are 3 important facts you need to know about the Rule:
1. If you are a “specified adult”, financial institutions may place a temporary hold on disbursement of funds or securities from your account when there is reasonable belief of financial exploitation.
2. When you open a new individual account or update a current one, your financial institution is required to make reasonable efforts to have you complete a trusted-contact authorization form. Completing this form is totally voluntary on your part.
3. The “trusted contact” is a person over the age of 18 whom the financial institution can contact if there is a reasonable belief that you are being financially exploited.
After reading the above information, you are probably asking “Who is a specified adult”? “Do I qualify as a senior investor”? “How long can a financial institution hold my funds?” Here is helpful information from FINRA:
“FINRA views the protection of senior investors, as well as baby boomers who are retired or approaching retirement, as a top priority. Because a large number of American investors are approaching retirement and control a substantial portion of investment assets, FINRA encourages firms to review and, where warranted, enhance their policies, procedures and practices, in light of the special issues common to many senior investors.
For example, a firm’s procedures and controls should take into consideration the age and life stage (whether pre-retired, semi-retired or retired) of their customers. Of particular concern to FINRA is the suitability of recommendations to senior investors, communications targeting older investors, and potentially abusive or unscrupulous sales practices or fraudulent activities targeting senior investors.”
For more detailed information, FINRA has prepared a FAQ regarding the new Rule which may be found at http://www.finra.org/industry/frequently-asked-questions-regarding-finra-rules-relating-financial-exploitation-seniors
Strategic Wealth Planning takes the safeguarding of all client accounts seriously. While SWP is not a member of FINRA, it closely follows FINRA guidelines. For more information about how SWP can provide you, your family and specified adults with account security and the appropriate investment information you deserve, please call us at 214-727-6000 to set up a confidential meeting.