Monday, December 14, 2020
Recently, the Financial Industry Regulatory Authority (FINRA) issued a new regulation to protect investors from unscrupulous financial advisors and brokers. Rule 3241 limits the ability of a broker-dealer to be named as a beneficiary, executor, trustee, or power of attorney for one of their customers. Broker-dealers must provide written notice to their firm, and the firm must assess the situation and determine whether to approve or disapprove of the fiduciary relationship.
Financial Advisors’ Exploitation of Senior Clients
Senior investors are at particular risk of exploitation or undue influence by fiduciaries. Studies indicate that approximately 5% of cognitively intact older adults admit to having been a victim of financial exploitation. It is believed that the actual rate is closer to 20%. Moreover, the percentage is surely higher for seniors with cognitive impairment and dementia. Unsurprisingly, many times the perpetrators are individu