Legislation Introduced to Protect Financial Advisers from Calling in Potential Elder Abuse

The House of Representatives passed a bill recently seeking to protect elderly investors. Industry trade groups urged the Senate to “quickly follow suit,” as reported by nasdaq.com in “Advisers May Get New Tools to Combat Elder Financial Abuse.”

The Senior Safe Act would provide civil and administrative liability protection to advisers, broker-dealers and other financial professionals who report suspected abuse to an agency—such as Adult Protective Services, law enforcement authorities, and state and federal regulators.

The bill says that compliance officers and other firm supervisors would be immune from liability as long as they had received training on identifying elder abuse.

With millions of baby boomers retiring, additional efforts are needed to protect the nation’s most vulnerable citizens.

There is companion legislation in the Senate authored by Susan Collins (R-Maine). That bill is awaiting consideration by the Senate Banking Committee.

Critics of the bill raise concerns that the shield from liability under privacy laws applies only to situations in which advisers report abuse to covered agencies. Frequently the best way to deter financial exploitation can be to alert the victim’s family. Fraud happens from people outside the family, and getting the family involved may be all it takes to make it stop, they argue. They go on to say that reporting to these agencies can just cause more problems for the family.

Three states recently passed laws that are even more stringent and require financial advisers to report suspected abuse instead of just giving them legal protection if they chose to alert authorities. These states are Alabama, Indiana and Vermont.

Reference: nasdaq.com (July 8, 2016) “Advisers May Get New Tools to Combat Elder Financial Abuse”