Regulators Continue to Focus on Senior Clients in Exams – Are You Ready?

Registered Investment Advisor (RIAs) should expect SEC exams to contain document request lists and specific questions focusing on how they are protecting seniors and vulnerable adults.  In RIA examinations performed this year by the SEC, document request lists and specific questions asked during the onsite interview process reflected the importance the SEC is placing on protecting “Seniors and Those Saving for Retirement” (see the SEC’s 2019 Examination Priorities).  The challenge of diminished capacity presents a major risk to your clients and their families if they are not prepared. It also presents a risk to your firm if you are not aware of how to address these issues. If your firm has not already begun addressing how it handles senior and vulnerable clients and the risks you and those clients face, the time to do so is now.

Below is a sampling of the questions that may be put to your firm during an exam:

  • At what age do you define a client as a senior?
  • How many clients have named a Trusted Contact?
  • When do you suggest to a client that they name a Trust Contact?
  • What training do you provide to your staff specific to senior investors?
  • How are issues related to senior clients escalated and to whom?
  • How do you handle changes in trustees and beneficiaries for your senior clients?
  • Do you have a policy for your advisors who may have diminished capacity?

Document requests have included:

Policies and procedures that address:

  • Issues of diminished capacity or competence associated with “senior Clients”
  • Establishing a point of contact
  • Monitoring and supervision around changes of powers of attorney, Client requests for changes of beneficiaries and trustees
  • Steps taken with client accounts upon death
  • Transition of Senior Clients from actively employed to retired status
  • Frequency of Advisor communications with client

Copies of Training materials used to teach employees and documentation of attendance

Client information, including the client’s age/DOB and additional power of attorney or power to withdraw money from the account

Oyster Consulting can help you prepare and establish the policies and procedures necessary to protect your senior clients and your firm and provide training to your employees.  Don’t be caught with inadequate policies and procedures. Visit our website for more information or click here to request a consultation.

About The Author

Theresa Muller is an accomplished compliance professional with over 20 years of experience in the financial services industry specializing in regulatory compliance and risk management for investment advisors. Prior to joining Oyster, Theresa was Vice President of Compliance for Wealthcare Capital Management LLC, a billion-dollar Registered Investment Advisor.


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