By Oyster Consulting LLCShare Article
Passage of the Senior Safe Act Will Provide Protection for Senior Investors
The Senior Safe Act (SSA) has been signed into law to provide protection for senior citizens from financial exploitation. The SSA is designed to enable investment professionals and others to work more effectively with law enforcement officials by protecting them from liability when suspected financial exploitation is reported under the circumstances described below.
The SSA has been described as “a carrot and not a stick.” That is because reporting suspected financial exploitation to a governmental agency is encouraged but not mandated by the SSA. Firms should, however, review other laws, rules and regulations that may apply to them to determine whether such reporting is required.
Investment professionals are often in a good position to detect signs of elder financial abuse. The SSA provides financial institutions and certain employees with protection from liability in any civil or administrative proceeding when those employees report suspected financial exploitation of a senior citizen to a governmental agency, provided that certain conditions are met.
First, the report must be made in good faith by a person who serves in a supervisory, compliance or legal capacity for the firm. The reporting employee must reasonably believe that financial exploitation may have occurred, may have been attempted or is being attempted.
Second, the financial institution must establish and administer a training program that educates employees regarding the identification and reporting of potential financial exploitation of senior citizen clients. The training must address the need to protect the privacy and respect the integrity of each individual client.
Financial institutions should consider the following elements when developing their training programs:
- identification of financial and other forms of exploitation of senior and vulnerable adult clients;
- identification of possible cognitive impairment;
- the proper establishment, handling and review of an account for a senior or vulnerable adult client including, where appropriate, the designation of an authorized third party as a trusted contact; and
- the process for documenting and reporting suspected financial exploitation of senior and vulnerable adult clients.
How Oyster Can Help
Developing policies, procedures, and training unique to your firm is time consuming, requires a deep knowledge of the subject and regulatory environment, and can have costly repercussions if it is not done correctly. Oyster Consulting has developed comprehensive Written Supervisory Procedures and Policies and Procedures that, once customized to your firms’ products and lines of business, will enable you to mitigate risks associated with vulnerable investor clients. Our training modules are thorough, easy to use, and can be quickly customized to your firm’s requirements.
Whether you are looking to change from self-clearing to fully-disclosed (or vice-versa), exploring your clearing options or starting a broker-dealer, Oyster can assist with the assessment, analysis, vendor selection and conversion processes.Download