Senior woman contemplating

The financial abuse of the elderly is an unpleasant and unfair situation and the investment industry may be in the best position to recognize it. Proposed regulations and laws are being considered to strengthen the industry’s ability to report it.

An investment company is in the unique position of often knowing a client’s investing position, the average flow of money in and out of an account and the general use of the money.

This actually gives them a fairly good picture of what your expenses are. It also puts them in a good position to know when an elderly client of theirs is being abused financially.

If a guardian or power of attorney makes disbursement requests that are well out of the ordinary for the elderly client, people in investment firms often suspect financial abuse. It may surprise you to learn that when elder abuse is suspected, the firms often do nothing. They disburse the funds as requested and do not report the suspicions to authorities.

The problem is that the companies are afraid of getting sued if their suspicions turn out to be wrong and they are afraid of violating federal privacy laws.

A recent article in Financial Advisors,Elder Abuse Rules In The Works For Investment Industry,” discusses several proposals both at the state and federal level to help with this situation.

Without going into the specifics of each and every proposal, there are two things that they do. The first is to allow investment companies to hold disbursements for a short period of time if elder financial abuse is suspected. This is uncontroversial and it would give legal cover to the industry. The second thing suggested is requiring the companies to report their suspicions to authorities. This is opposed by the industry as they fear damaging relations with clients if they suspect wrongly.

A number of laws and proposals are in the works to help the investment industry help the elderly should financial abuse be suspected.

Reference: Financial Advisor (Nov. 12, 2015) “Elder Abuse Rules In The Works For Investment Industry

For more information on elder law and estate planning, please visit my estate planning website.

Mr. Amoruso concentrates his practice on Elder Law, Comprehensive Estate Planning, Asset Preservation, Estate Administration and Guardianship.