Chicago-based Stoltmann Law Offices represents elderly investors who’ve been defrauded by financial advisors, insurance agents, and investment advisers. Did you know that brokerage firms are required to maintain a list of “trusted contacts” for their older clients? That ensures that investors have a safeguard against broker abuses. A relatively new rule from FINRA, the federal regulator for the U.S. securities industry “requires firms, for each of their non-institutional customer accounts, to make a reasonable effort to obtain the name and contact information for a trusted contact person (TCP) age 18 or older.”
Why does such a rule exist? To protect senior investors, who are frequently the target of scam investments, excessive trading, and sales of products that take on unnecessary risk.
“A trusted contact,” according to FINRA, “is a person you authorize your financial firm to contact in limited circumstances, such as if there is a concern about activity in your account and they have been unable to get in touch with you. A trusted contact may be a family member, attorney, accountant or another third-party who you believe would respect your privacy and know how to handle the responsibility. You may establish more than one trusted contact.”