FSI’s Brown To Washington: Pass The Financial Exploitation Prevention Act

Advisors Need The Tools To Protect Seniors, Who Are A Prime Target For Scammers
Dale Brown, President & CEO, Financial Services Institute
Dale Brown, President & CEO, Financial Services Institute

For over 20 years, FSI’s primary mission has been to foster the best possible business environment for independent firms, advisors and the Main Street investors they serve nationwide. That goal will always be at the core of who we are.

We know that an essential part of an advisor’s business is their relationship with their clients and protecting them from potential financial exploitation is an important part of that dynamic. That’s why, in conjunction with World Elder Abuse Awareness Day last month, we, along with a handful of industry partners, urged lawmakers in the Senate to pass and President Biden to sign the Financial Exploitation Prevention Act.

No Signs Of Easing

Elder financial abuse, which costs Americans billions each year, has been and continues to be an enormous problem. And, unfortunately, it shows no signs of easing.

In 2022, the Bureau of Justice Statistics reported nearly 170,000 incidents of fraud against adults over 65 years old. Meanwhile, the Justice Department says elder abuse complaints increased by 14% last year, while investor losses resulting from fraud went up 11% over the same period.

Sadly, it’s reasonable to expect these issues to worsen in the coming years.

That’s because America’s baby boomers control trillions in assets, and as they continue to age, the combination of their wealth and potential vulnerabilities makes them a perfect target for scammers – who, incidentally, are getting savvier with each passing day. Indeed, the sophistication of fraudsters’ tools is evolving fast, with cutting-edge technologies like AI making elder financial abuse more of a concern than ever before.

Establishing Robust Legislative Protections

All of this is why time is of the essence. FSI has advocated for strengthening laws and regulations to protect seniors and vulnerable adults from financial abuse, including passionately supporting NASAA’s Model Act to Protect Vulnerable Adults from Financial Exploitation and the Senior Safe Act in 2018.

But more can be done to provide additional safeguards for our seniors. The Financial Exploitation Prevention Act does just that.

Even though the House of Representatives unanimously passed it last year, the Senate has yet to vote on it. The legislation, among other things, allows financial services firms to delay securities redemptions if they reasonably suspect the financial exploitation of seniors or individuals with diminished capacity.

Advisors are often the first line of defense when combatting elder financial abuse.

Dale Brown, President & CEO, Financial Services Institute

Advisors are often the first line of defense when combatting elder financial abuse. What some outside the industry may not realize is that financial advisors have insight into clients’ spending habits, accounts and relationships, making them well-positioned to identify irregular activities and behaviors that suggest exploitation. Therefore, endowing them with more tools to identify and combat financial abuse isn’t just a nice additional step – it is an essential one.

Working Together

I firmly believe that our industry and lawmakers must work together to safeguard the nation’s most vulnerable citizens. With that in mind, and as financial crimes against seniors continue to rise, I am pleading with the Senate to pass this crucial piece of legislation.

It would mark a vital step in defending the financial security and dignity of our elderly, ensuring that they can spend their golden years happily and financially secure.

Dale Brown is the President and CEO of the Financial Services Institute.

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