Vulnerable seniors are getting more protection from financial exploitation, thanks to a new Florida law that went into effect on July 1, 2020. The new law increases the ability of financial advisors to take action when they suspect their elderly clients are being victimized.
The new measure is certainly needed: According to the National Adult Protective Services Association, financial exploitation of seniors is a fast-growing phenomenon. Seniors are the perfect victims: They have the largest percentage of the nation’s wealth, and every day 10,000 individuals turn 65. Two thirds of financial crimes against the elderly are committed by family, friends and other trusted individuals, according to a 2018 Wells Fargo study. Victims are often isolated, and may be too embarrassed to report crimes to authorities.
How The New Law Helps Financial Advisors Protect Clients
HB-813 expands protections for vulnerable adults under section 415.0134 of the Florida Statutes. Simply put, it gives financial advisors and security dealers more power to take action if they suspect a client who is older or impaired is being financially exploited, and provides protections for them for reporting their suspicions.
A financial advisor may now freeze or delay a transaction or disbursement of funds or securities from the account of a senior or an account on which the senior is a beneficiary, if he/she has reason to believe that financial exploitation is occurring or being attempted.
Within three days of the freeze, the advisor must notify in writing all parties who are authorized to transact business for that account, as well as anyone named as a trusted contact for that account. (Except, of course, the individual suspected of financial exploitation). The advisor must notify the Florida Office of Financial Regulation within three days of the freeze or delay. An internal investigation of all the facts surrounding the freeze must be undertaken in the adviser’s organization.
The transaction/disbursement delay will expire 15 days after the date it occurred. However, the investment adviser or securities dealer may extend the time by 10 days if the ongoing investigation takes more time and seems to support the suspicion that financial exploitation is present.
Organizations are expected to provide training to staff in how to spot financial abuse. Any adviser who exercises these powers in good faith and complies with 517.34 is immune from civil liability or administrative liability.
Your Financial Advisor Should Be Acquainted With Your Situation
Financial advisors should be mindful of their client’s specific circumstances, says Damon Boyar[1], Wealth Management Advisor at LPL Financial. As a financial advisor and fiduciary it is very important to know your client, their situation, and what vulnerabilities they may have that need to be monitored,” he says. “Each individual presents differently based on their family dynamic and the complexities of their finances. It is important to plan ahead to protect your assets and to ensure your wishes are followed and maintained as you get older.
“Start the conversation, talk to your financial advisor, your estate attorney, your CPA, and a trusted family member. Set up checks and balances with your trusted contacts, be organized, aware, and proactive. Ask questions, after all, it’s your money.”
Read a summary of the new law here and here.
If you are looking for a financial advisor, The Karp Law Firm can provide you with the names of several individuals with whom we’ve worked over the years. Call our office at 561-625-1100 for assistance.
[1] Damon J. Boyar is a registered representative with, and securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Gaines Financial Group, a registered investment advisor and a separate entity from LPL Financial.
