Financial abuse of older and vulnerable investors
Older Canadians are very often made the target of financial scams and financial abuse —as a matter of fact, senior financial abuse is the most common type of abuse of older adults. Due to confusion, social isolation, diminished capacity, or simple lack of understanding, the older people in our lives can be more vulnerable to financial abuse or exploitation. It can sometimes be difficult to spot because the abuse can take many forms and may manifest as a pattern of events over time rather than a single event.
Help protect yourself, and the older adults in your life – have the talk and make a plan
Having open and honest conversations about your plans and future financial wishes now, although they may be uncomfortable, can help avoid trouble in the future. Although no one likes to think about potential unpleasant situations, having a plan and trusted people in place now can help protect you and your financial wishes in the future.
Consider naming a Trusted Contact Person
Effective December 31, 2021, as part of opening an account and keeping your client information up to date, your advisor is required to ask if you would like to name a Trusted Contact Person (TCP). When appointing a TCP, you will provide written consent for this person to be contacted to assist your financial advisor if they have concerns that you’re being financially exploited or showing signs of diminished mental capacity. While appointing a Trusted Contact Person is optional, naming a TCP can give you peace of mind knowing that your financial advisor has an additional resource to help them make decisions about protecting your account. It allows your financial advisor to know who you trust and who they have permission to contact when they are concerned about your wellbeing under specific situations.
Although a Trusted Contact Person can help safeguard your financial assets, they are not authorized to make transactions on your account, cannot make decisions on your behalf, and will not be given access to your detailed account information. You can decide when your TCP should be involved. This may include when your advisor:
- has concerns about possible financial exploitation affecting you or your account
- has concerns about diminished mental capacity
- needs confirmation of your legal representative(s)
- receives no response after several attempts to contact you
A Trusted Contact Person should be someone you trust, is mature, and can handle difficult conversations about your personal situation. Consider choosing someone who:
- will protect your interests
- will be comfortable talking to your financial advisor
- knows you well enough to notice changes in your personal situation
- is familiar with your support network
- agrees to take on the role
- is typically not involved in decisions about your finances, and preferably, is not your power of attorney.
It’s important to let your TCP that know that you have appointed them as your Trusted Contact Person. This may help your TCP feel comfortable talking with your financial advisor if they are contacted. If your situation changes, you can contact your financial advisor at any time to add or update your Trusted Contact Person.
Consider appointing a power of attorney.
A power of attorney is a legal document that authorizes someone to stand in your place and manage your financial or personal affairs if you are unable to do so. The person you appoint as your “attorney” under your power of attorney does not have to be a lawyer. They should be someone who knows you well and who you trust to carry out your wishes. They do not have to be the same person you named as your Trusted Contact Person. You should introduce them to your legal and financial professionals. You can name more than one, or a back up attorney. Discuss your wishes together so that there can be no confusion later about how you would want your affairs handled. The rules around power of attorney vary by province.
How to report elder financial abuse
If you think you or someone you’re close with are being taken advantage of financially, ask for help. Talk to someone you trust, such as a friend, family member, police officer, lawyer, or staff member at your financial institution.
Sometimes, older adults experiencing financial abuse may decline help because they fear what will happen to themselves or the abuser; because of family loyalty; or because they don’t know where they can get help. If an older person you know declines help, don’t give up. Support their wishes, reassure them that you are here to help, continue to offer support, provide information, and consult with professionals if necessary. If at any point you’re worried about the immediate safety of the older person, contact the police immediately.
For more information on how appointing a TCP can protect your investment, read here.
TCP 101 – What is a Trusted Contact Person?
To provide more information to your TCP on their role, complete the following form and ensure they are provided with a copy.
CSA Trusted Contact Person Checklist