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Counties that have a large population of wealthy elderly people also have problems with brokers.

Broker misconduct is costing elder Americans $17 billion annually, according to estimates from the White House.

An article in Forbes entitled “What Your Aging Parent’s Broker Isn’t Telling You” details a recently released study conducted over a 10-year period by researchers at the University of Chicago and the University of Minnesota that reveals broker misconduct is very common in counties that have a large population of elderly people who are wealthy.

Palm Beach, Fl., for example, has a broker misconduct rate of 18.1%. In other words, 18.1% of brokers in that county had in some way violated the trust of their clients and caused financial losses for those clients.

This is a form of elder abuse if brokers are intentionally taking advantage of elderly clients who might be suffering from memory loss or a lack of attention.

Forbes has a couple of suggestions to help protect against the problem:

  • The website BrokerCheck lists most violations and disciplinary actions that have been taken against brokers. Information can be searched by a broker’s name and firm. Not all violations and reports are listed on the site, but it is a good starting point as one-third of violators are repeat offenders.
  • If you are not certain about the investment advice being given by a broker, it is a good idea to get a second opinion from someone with whom you have a fiduciary relationship. For example, an elder law attorney or accountant might be able to give you a general idea about the broker’s reputation and the soundness of investment strategies.

Reference: Forbes (March 15, 2016) “What Your Aging Parent’s Broker Isn’t Telling You

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.