Protecting Senior Investors with a Trusted Contact

The Financial Industry Regulatory Authority (FINRA) has made an important regulatory change that will impact all new accounts.  Th rule is intended to safeguard vulnerable investors from financial exploitation.  

The US Securities and Exchange Commission (SEC) approved this rule, proposed by FINRA, to protect seniors and other specified adults from financial fraud and abuse.  Effective as of February 5, 2018, FINRA Rule 2165 will require FINRA broker-dealers to:

  • offer the option of adding the name of a Trusted Contact to all new accounts of seniors and specified adults, 
  • maintain a record of the name and contact information for a Trusted Contact who may be contacted about a customer’s account, and
  • permit FINRA broker-dealers to place a temporary hold on the disbursement of funds or securities from the accounts of certain customers if there is a reasonable belief that the customer may be subject to financial exploitation. 

All new account applications will include an optional form that will allow participants to appoint a Trusted Contact for their account(s).  If you elect to designate a Trusted Contact for any or all of your accounts, this person can be contacted by your advisor or custodian if they suspect any abnormal withdrawal or transfer activity.

For more detailed information on this rule please click here.