The SEC recently approved two new rules: (1) 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 customers where there is a reasonable belief of financial exploitation of these customers; and (2) 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.
While Armbruster Capital is not overseen by FINRA, any changes imposed on FINRA members, such as our custodians Charles Schwab and TD Ameritrade, tend to find their way onto our “to do” list. In this case, the rules do offer common-sense protections for older clients. Unfortunately, elder abuse and financial exploitation are growing issues.
Accordingly, we are talking with all new clients about the ability to add a “trusted contact” to their accounts. This would be someone who the custodians or our firm can contact if suspicious activity is suspected. Existing clients can also add a trusted contact to their accounts; just let us know if you would like to do so.
Ideally, the trusted contact would be a close family member or friend. This person would not have access to view or make transactions in your accounts. Rather, the trusted contact would be someone who would be able to act as your emergency contact should you become unable to manage your account, or if we are unable to reach you directly.
As always, our updated Form ADV, which describes a number of our compliance practices, is available at our web site or upon request.
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