Every day now in the US, around 10,000 baby boomers retire. These boomers will live longer than any generation in human history. However, as life expectancy increases, so does the chance of experiencing some sort of diminished mental capacity. According to the Alzheimer’s Association, around 10% of Americans over 65 are afflicted with Alzheimer’s — and that’s only one of the most common cognitive diseases facing aging boomers.
Elder Financial Abuse Affects One in Five Seniors
These Americans are the primary targets of financial predators. Shockingly, many of these predators lurk in the families of the victims. While elder financial abuse is a legal issue, because much of the baby boomer’s wealth is managed by stock brokers and brokerage firms, it is also a regulatory issue. Possibly THE regulatory issue of today and tomorrow.
Approximately one in five Americans who are over 65 will suffer some form of elder financial abuse, and estimates suggest that more than $30 billion is lost every year due to investor fraud, caregiver abuse, and other forms of financial exploitation.
New Regulations Against Elder Financial Abuse
Last year, the securities industry regulatory body, FINRA, passed a new rule that allowed brokerage firms to freeze investment accounts in which there was a suspicion of elder fraud or abuse. While controversial, the rule is an attempt to stem the tide of money rushing out of aging investors’ portfolios and into those of predators. Another aspect of the rule is that elderly clients must name a trusted person on their account who may be contacted in the event that fraud is suspected. Together, these changes mark a shift in the way we approach elder financial abuse. In order to ensure that financial advisors and brokerage firms understand and observe the new regulations, FINRA has announced that it will not add questions about these regulations to its qualifying exams.
It’s good to see the industry responding to what seems to us to be the single greatest threat to the financial well-being of this country. As the largest and richest generation in the history of our country begins to age, it’s vitally important that they not also become the most victimized.