Creating a catchy title for federal legislation must be its own niche on Capitol Hill. The aptly named Senior$afe Act must have been coined by a financial planner.
It begins to answer the question of how we reduce senior financial fraud. Brokerages and financial advisors would play a stronger role as a first line of defense. Of cases reported, an overwhelming majority have gone undetected for too long. These delays have devastating consequences on seniors who rely on their accumulated life savings to cover expenses.
This recent legislation aims to protect seniors from financial abuse by encouraging reports of suspected fraud. It passed the Senate Banking Committee in early December. In the House, the Financial Services Committee passed a similar bill in October.
The bill requires additional standardized training for financial advisors on how to identify and report instances of suspected financial abuse.
Immunity from liability
Concerns about violating privacy laws have at times tied the hands of financial advisors. The legislation addresses this by providing certain civil and administrative immunity to financial service firms and advisors who receive training. This would allow companies to and regulators to work together to better protect retirement saving.
There has been bi-partisan support for the bill.
Recognizing financial fraud
It can be nearly impossible to uncover that an elder loved one is losing his or her savings due to financial fraud. Any “new” friend who takes an unusual interest in finances or accounts should be a red flag. Several others include:
- Abrupt changes to account beneficiaries or estate planning documents
- A caretaker or relative who suddenly starts handling financial transactions
Age-associated financial vulnerability is the term given to patters of imprudent financial decisions that start to occur in the 70s and 80s. An Allianz survey estimates that on average a victim of elder financial abuse loses almost $40,000. Other surveys place the figure higher, but even a small financial loss can affect financial security and even health.
While financial professionals are well placed to identify signs of financial fraud, you may also spot behavior that causes alarm. When it is time to step in and assist with financial decisions or seek a change in who is helping with these decisions? Discuss your unique situation with an experienced attorney who can provide individualized legal advice.