Give Advisors Tools To Protect Seniors, NASAA Chair Says

WASHINGTON, D.C. -- When it comes to protecting seniors from financial exploitation, financial advisors are often on "the front lines," Andrew Hartnett said.

So it makes sense to give them the tools to identify and report such abuses, added Hartnett, chairman of the broker/dealer section of the National American Securities Administrators Association.

With that in mind, NASAA passed a model act earlier this year that mandates reporting to the state securities regulator and state adult protective services agency when a broker or advisor suspects that financial exploitation of someone 65 or older has been attempted or has occurred.

"The goal of this model act is to expand the safety net for seniors ... while respecting the dignity and independence of senior investors," Hartnett said Tuesday at the Insured Retirement Institute's Government, Legal and Regulatory Conference 2016.

In addition, the model act enables broker/dealers or advisors to place a hold on disbursements from an account for up to 15 business days if financial exploitation is suspected. The delay can be extended for an additional 10 days at the request of either the state securities regulator or adult protective services.

It also provides immunity from administrative or civil liability for firms and advisors who go through training, and it requires them to provide relevant records.

Citing an example from Maine, Hartnett said training helped a bank official spot and investigate exploitation after seeing a customer who was accompanied by a stranger. The bank employee called the customer's home. An unfamiliar person answered the telephone and said the person in question "doesn't live here anymore," Hartnett recounted.

Officials were called and the victim was rescued from the situation, he said.

So far, Alabama has adopted a bill based on the NASAA model, and other states are considering similar legislation. While protecting seniors is a bipartisan issue, this year is a difficult year to get legislation passed, Hartnett said.

"I think you'll see versions of it introduced in a lot more states next year," he added.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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