Keep Your Eye on the Money
The New York Times has featured two articles recently on elder financial abuse issues. The newspaper's commitment to raising awareness about elder exploitation and abuse is admirable, and is part of a national campaign to bring this billion-dollar problem more squarely into the public eye. As the largest and wealthiest generation of Americans, the Baby Boomers, retired and enter end of life care, what happens to their vast assets will be something their adult children will have to grapple with. Along with this challenge comes the responsibility to keep close watch over how financial advisors and brokerage companies manage the finances of elderly parents and relatives.
Taking Advantage of Elderly Investors
The most recent New York Times article, Caring for Aging Parents, with an Eye on the Broker Handling Their Savings, provides a disturbing blow-by-blow account of one woman's struggle to identify and win compensation for the financial abuse of her aging mother, who suffers from Alzheimer's, at the hands of a predatory broker who allegedly churned her mother's account. It is an all too familiar story, unfortunately. One need only review the litany of abuses contained in the monthly disciplinary reports issued by the securities regulatory authority, FINRA, to see that elder financial abuse is a major problem that is not going away.
Brokers who are inclined to exploitation can find any number of ways to take advantage of a client who is aging and suffering from dementia, or even just absent-mindedness. Without their mind on their money, brokers can squeeze extra commissions out of the account through excessive trading, as was the case in the Times article, or unnecessary asset exchanges, excessive risk, hidden fees, overly expensive complex financial products, and so on. The list of possible angles goes on.
No Fiduciary Duty
One of the major reasons that brokers can take advantage of elderly investors - often without consequences - is that they do not owe their client's a fiduciary duty, which would mean that they must always put the best interest of the client over their own. Rather, brokers must only meet hte lower "suitability standard," which insists that investments match investors. This lower standards effectively opens the doors for many types of abuses which give brokers permission to invest in products which might be equally suitable to a given investor but which are not equal in the eyes of the broker, who might make more fees on one product than on another.
Pennsylvania & New Jersey Elder Financial Abuse Law Firm
If you or someone you know has been the victim of financial abuse or investment fraud, please contact our attorneys immediately for a free consultation toll-free at 215 462 3330 or by using our online contact form.