Financial advisers often see or suspect that an elderly client is being swindled or taken advantage of financially — but few do anything about it.
According to a study published in Investment News, 62 percent of financial advisors came across financial abuse of the elderly, but more than half of those people admitted they failed to report it, usually because they didn’t have evidence to back it up.
The publication surveyed nearly 600 financial advisors. They said the other reason they didn’t report it is over privacy concerns or because they didn’t know who to call.
About five million older adults in the U.S. are victims of financial elder abuse annually. According to the National Committee for the prosecution of Elder Abuse, financial abuse can happen in a number of forms, including:
- Taking money or property
- Forging signatures
- Tricking an elder into signing a deed, will or power of attorney
- Using property and possessions, such as a car, without permission
- Falsely promising caregiving to obtain money or property
- Scamming and committing fraud, which can include deception, false pretense and other dishonest acts for financial gain
- Telemarketing scams that use scare tactics – like telling an elder his or her grandchild is in jail in a foreign country and needs money to get home – and other scams to get credit card info.
The Investment News report had more said news: in 65 percent of the cases, the suspect was a family member. A caregiver was responsible a third of the time.
Nearly half of those polled felt that financial advisers had a duty to report their suspicions or findings to local authorities, even though they didn’t.
The problem has gotten so widespread that the Financial Industry Regulatory Authority is stepping in. Starting in 2018, securities firms will be required to try to take steps to do their part in preventing elder financial abuse, including obtaining contact information of a person who is trusted by the elderly client.
“FINRA views the protection of senior investors, as well as baby boomers who are retired or approaching retirement, as a top priority,” the nonprofit said in a statement on its website. “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.”
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