Elder abuse and neglect has been a sad topic in the news for many years now, from nursing homes that do not provide protections for elders in their care to scammers who often successfully financially drain vulnerable seniors. Because of the financial scams, in April 2015, the Financial Industry Regulatory Authority (FINRA), the organization in charge of regulating U.S. professionals and firms that sell securities, started a helpline for seniors. Since the inception of the helpline, FINRA reports that it has received more than 12,000 phone calls. The organization has also helped to recover more than $5.3 million in investment funds that were either inappropriately or illegally disbursed.

The New Safeguards

FINRA announced new rules in February 2018 that are designed to help protect seniors, as well as other adults who are vulnerable, from possible financial exploitation. Before these new rules were put into place by FINRA, privacy issues arose, preventing financial advisors and brokers from reaching out to anyone other than the investor if any suspicious activity occurred. Also, putting a freeze on disbursements was possible grounds for liability issues for firms and professionals. However, due to the excruciatingly high number of complaints that the FINRA received in such a small amount of time, something had to be done to protect seniors and other vulnerable adults from financial abuse.

FINRA Rule One

The first rule ensures that investment advisors or brokers require the investor to supply the name and contact information of a trusted person. If there are any questions that the broker or advisor has, or there is reason to believe that potential financial exploitation is taking place, this contact person can provide the investor’s current contact information, health status, or the contact information for an executor, legal guardian, holder of power of attorney, or trustee.

FINRA Rule Two

The second rule gives a broker or advisor the right to place a temporary hold on any disbursements from any account if there seems to be any suspicious activity. This rule only applies to accounts that belong to investors with physical or mental impairments or those who are aged 65 or older. The brokerage firm has the right under this new rule to investigate any suspicions by contacting the investor, the trusted contact person, or law enforcement, if necessary, prior to any disbursements.

Since our elderly population is growing so fast, it is crucial that we all take a part in protecting those who are vulnerable to potential abuse and neglect. These new rules that the FINRA has put into motion are a step in the right direction. If you know a senior who has investments, contacting an estate planning attorney would also be a step in the right direction. At MMZ Law, we are just as invested in protecting our seniors as the FINRA is, and we will take all of the necessary precautions to help protect the assets of our clients and advocate for them. Contact us today at (909) 256-6702.




341 W. 1st St. Suite 100
Claremont, CA 91711

MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.

This information is educational information only and not legal advice.