The North American Securities Administrators Association (NASAA) released a guide to assist broker-dealer and investment adviser firms in developing practices and procedures to detect and address instances of diminished capacity in senior and other clients and suspected cases of senior financial exploitation.
“NASAA has prepared this guide to provide broker-dealers and investment advisers with useful information for detecting, reporting, and mitigating senior financial exploitation,” said NASAA President and Maine Securities Administrator Judith Shaw. “We hope this guide encourages financial services firms to continue to identify and implement additional practices that address the particular needs of senior investors.”
The NASAA guide highlights steps that firms can take to identify and respond to issues that are common in working with senior investors, including new tools that may be available under state law. The guide is structured around five key concepts: identifying vulnerable individuals; governmental reporting; third-party reporting; delaying disbursements from client accounts; and continuing regulatory cooperation following reports or disbursement delays.
The guide was compiled after substantial research and consultation with a broad range of experts, including securities industry associations representing broker-dealers and investment advisers, advocacy organizations for seniors, and other organizations representing agencies on the front lines of addressing senior financial exploitation and diminished capacity issues.
Shaw noted that the guide is designed to complement the recently adopted NASAA Model Act to Protect Vulnerable Adults from Financial Exploitation in an effort to assist in implementing its requirements or other similar state laws. However, the guide does not create or modify existing regulatory obligations with respect to senior investors, and does not catalog the full range of compliance practices applicable to senior investors.
“Implementing robust policies and procedures and training programs that encourage firms to protect their senior clients from the adverse consequences of financial exploitation and diminished capacity, and that foster strong relationships among industry, state securities regulators, local Adult Protective Services agencies, and law enforcement, will be a significant step toward addressing the serious issues facing seniors and other vulnerable investors,” Shaw said.
The guide was developed by NASAA’s Senior Issues and Diminished Capacity Committee and is available on NASAA’s Serve Our Seniors website (serveourseniors.org).