Compliance corner: Name trusted contact to help protect against elder abuse

Financial elder abuse is a frightening thing, and not something many people expect to deal with or plan for. At Fort Pitt we’re fiduciaries, which means we act in our clients’ best interest. We’re encouraging everyone to set up “trusted contacts” with their custodian (i.e., Charles Schwab, Fidelity, TD Ameritrade) after the passage of a recent FINRA rule. Your custodian may have already contacted you to set up a trusted contact, and we are supporting this endeavor and can help as needed. Naming a trusted contact allows them and us to be in a better position to keep your accounts safe.

Through FINRA Rule 2165, investors are allowing their custodian to place a temporary hold on an account and contact someone the client trusts (the named trusted contact) if there is reasonable belief that financial exploitation is taking place.

It’s important to note that your trusted contact cannot place trades and doesn’t have any control over your account. This by no means gives them your power of attorney – it just provides an additional person that can be notified if/when financial exploitation is suspected. The trusted contact can either provide reassurance that the request is valid or can address it with you directly. This is strictly to have an extra safeguard measure on your account. It’s important to note that this individual won’t receive requests from anyone (including Fort Pitt) with basic questions about the account.

As part of our fiduciary duty, Fort Pitt is always focused on doing what’s in the best interest of our clients whether that means managing your assets according to the strategy selected or monitoring your account for unusual activity. As much as we are your financial council, we’re also relationship managers. As a part of building those relationships, we are apt to notice red flags because we know our clients and as a trusted part of their financial team, we can add a layer of protection against unusual activity.

We encourage investors to consider this recommendation and to be proactive with their financial security. Within minutes, Fort Pitt can help you set up a trusted contact. The SEC has also created an Investor Alert to help investors be proactive about planning for and protecting their financial future.

Nathan Boxx, Bradley Newman, Jason Seltzer

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