2016 FINRA/SIFMA Senior Investor Protection Conference
Financial Industry Regulatory Authority/SIFMA
“2016 FINRA/SIFMA Senior Investor Protection Conference”
October 20-21, 2016
Key Topics & Takeaways
- FINRA Rule 2165: FINRA filed a proposed rule with the SEC that would allow FINRA members to temporarily hold a suspect disbursement, and would require its members to make reasonable efforts to obtain a Trusted Contact at account opening.
- Professional Coordination: Dr. Mark S. Lachs drew attention to the science of aging and geriatric medicine, the relationship between money, health and aging and how age associates with financial vulnerability. He advised that responsible professionals should train people to interact effectively with older adults and create relationships with geriatricians.
- Resources: Financial advisors are increasingly finding themselves confronting potential senior financial fraud or cognitive issues with their clients. Tools like SIFMA’s Senior Investor Protection Toolkit, as well as initiatives from AARP (BankSafe) and the SEC’s (ReTIRE) all serve as resources or provide helpful information for financial services professionals.
Speakers
- Ira Hammerman, General Counsel, SIFMA
- Chip Jones, Senior Vice President, FINRA Member Relations and Education
- Surya Kolluri, Managing Director, Policy and Market Planning Global Wealth and Retirement Solutions, Bank of America Merrill Lynch
- Debra Whitman, Executive Vice President and Chief Public Policy Officer, AARP
- Dr. Mark S. Lachs, M.D., Director of Geriatrics, New York Presbyterian Health System and Weill Cornell Medical College
- Andy Blocker, Executive Vice President, Public Policy and Advocacy, SIFMA
- Kevin Goodman, Associate Director, SEC
- Michael Rothman, President, North American Securities Administrators Association (NASAA); Commissioner, Minnesota Department of Commerce
- Ronald Long, Senior Vice President and Director of Regulatory Affairs & Elder Client Initiatives, Wells Fargo Advisors, LLC
- Suzanne McGovern, Assistant Director, U.S. Securities and Exchange Commission
- Full List of Speakers
Welcome Remarks
Ira Hammerman, General Counsel, SIFMA
In his opening statement, Ira Hammerman highlighted SIFMA’s near-decade of experience in senior investor protection efforts and the increased attention the topic has garnered from regulators, advocates and a wide array of professionals more recently. Hammerman noted that senior investors lose an estimated minimum amount of $2.9 billion per year in media-reported cases of financial exploitation, according to a MetLife study, and that it has been estimated that only 1 in 44 cases of exploitation are ever reported to authorities. Hammerman added that beyond exploitation, we must also consider the risks associated with cognitive decline, particularly decline in healthy adults that occurs as part of the normal aging process. He also described SIFMA’s work streams to better understand and address these risks, including implementing innovative policies and procedures, and advocating for targeted regulatory and legislative changes that would allow firms to better address this emerging issue.
Chip Jones, Senior Vice President of Member Relations, FINRA
In his opening statement, Chip Jones stated that, due to FINRA’s Securities Helpline for Seniors, $2.3 million has been returned to investors, adding that the senior helpline gets about 50 calls per day from investors ranging in age from 22 to 102.
Understanding the Decision Maker Panel
The panel discussed aging clients’ decision making and the evolvement of our understanding of that decision making due to new scientific advancements. Surya Kolluri, Bank of America Merrill Lynch, described his firm’s partnership with industry experts and institutions, like the Stanford Center on Longevity, to better understand the aging client and develop training materials for advisors. AARP’s Deb Whitman emphasized AARP’s efforts through their BankSafe initiative that provides financial institutions with tools to protect consumers from financial exploitation and help safeguard savings.
Academic/Scientific Keynote Address
Dr. Mark S. Lachs, M.D., New York Presbyterian Health System and Weill Cornell Medical College, drew attention to the science of aging and geriatric medicine, the relationship between money, health and aging and how age is associated with financial vulnerability. He affirmed that financial resources and health are highly related. Dr. Lachs stated that financial exploitation is the most common form of elder abuse: 5% annually for those over age 60. He advised that responsible professionals should train people to interact effectively with older adults and create relationships with geriatricians. Dr. Lachs concluded that a collaborative effort between the most trusted professionals in the life of an older adult and their family members will help avoid exploitation.
Regulatory and Legislative Update Panel
This panel reviewed the current regulatory and legislative structure surrounding senior investor protections and the ongoing challenges regulators and financial services professionals face. Andy Blocker, SIFMA, stated that the Financial Industry Regulatory Authority, Inc. (“FINRA”) had filed with the Securities and Exchange Commission (“SEC”) a proposed rule change to: (1) amend FINRA Rule 4512 (Customer Account Information) to require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account; and (2) adopt new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers. Blocker added that the Senior$afe Act is moving through congress and the Elder Abuse Prevention and Prosecution Act was introduced earlier this year.
Kevin Goodman, SEC, stated that the senior population is growing exponentially and the group needs to be addressed about protection. He noted the Commission’s ReTIRE Initiative, which is a targeted examination program looking at some of the challenges facing retail investors. Michael Rothman, NASAA, described their Coordinated Exam initiative and NASAA model Report & Hold Act. He further noted that it was important for NASAA to, “try to achieve uniformity.” Rothman emphasized the importance of training for client-facing representatives and associates.
Ask the Regulator and Industry Experts Panel
The panel facilitated a dialogue regarding importance of the industry and regulators working together on senior investor protection issues. The panel discussed how financial advisors are increasingly finding themselves confronting potential senior financial exploitation, fraud or cognitive issues with their clients. The panel discussed how to identify red flags when there is no face-to-face contact with the client, and Suzanne McGovern, SEC, highlighted that firms are beginning to look at IP addresses and asking questions like, “does the client sound like they are 80 years old?” Ron Long, Wells Fargo Advisors, added that firms are going to need new technology to stay ahead of the exploiters.
For more information on this event, please click here.
Financial Industry Regulatory Authority/SIFMA
“2016 FINRA/SIFMA Senior Investor Protection Conference”
October 20-21, 2016
Key Topics & Takeaways
- FINRA Rule 2165: FINRA filed a proposed rule with the SEC that would allow FINRA members to temporarily hold a suspect disbursement, and would require its members to make reasonable efforts to obtain a Trusted Contact at account opening.
- Professional Coordination: Dr. Mark S. Lachs drew attention to the science of aging and geriatric medicine, the relationship between money, health and aging and how age associates with financial vulnerability. He advised that responsible professionals should train people to interact effectively with older adults and create relationships with geriatricians.
- Resources: Financial advisors are increasingly finding themselves confronting potential senior financial fraud or cognitive issues with their clients. Tools like SIFMA’s Senior Investor Protection Toolkit, as well as initiatives from AARP (BankSafe) and the SEC’s (ReTIRE) all serve as resources or provide helpful information for financial services professionals.
Speakers
- Ira Hammerman, General Counsel, SIFMA
- Chip Jones, Senior Vice President, FINRA Member Relations and Education
- Surya Kolluri, Managing Director, Policy and Market Planning Global Wealth and Retirement Solutions, Bank of America Merrill Lynch
- Debra Whitman, Executive Vice President and Chief Public Policy Officer, AARP
- Dr. Mark S. Lachs, M.D., Director of Geriatrics, New York Presbyterian Health System and Weill Cornell Medical College
- Andy Blocker, Executive Vice President, Public Policy and Advocacy, SIFMA
- Kevin Goodman, Associate Director, SEC
- Michael Rothman, President, North American Securities Administrators Association (NASAA); Commissioner, Minnesota Department of Commerce
- Ronald Long, Senior Vice President and Director of Regulatory Affairs & Elder Client Initiatives, Wells Fargo Advisors, LLC
- Suzanne McGovern, Assistant Director, U.S. Securities and Exchange Commission
- Full List of Speakers
Welcome Remarks
Ira Hammerman, General Counsel, SIFMA
In his opening statement, Ira Hammerman highlighted SIFMA’s near-decade of experience in senior investor protection efforts and the increased attention the topic has garnered from regulators, advocates and a wide array of professionals more recently. Hammerman noted that senior investors lose an estimated minimum amount of $2.9 billion per year in media-reported cases of financial exploitation, according to a MetLife study, and that it has been estimated that only 1 in 44 cases of exploitation are ever reported to authorities. Hammerman added that beyond exploitation, we must also consider the risks associated with cognitive decline, particularly decline in healthy adults that occurs as part of the normal aging process. He also described SIFMA’s work streams to better understand and address these risks, including implementing innovative policies and procedures, and advocating for targeted regulatory and legislative changes that would allow firms to better address this emerging issue.
Chip Jones, Senior Vice President of Member Relations, FINRA
In his opening statement, Chip Jones stated that, due to FINRA’s Securities Helpline for Seniors, $2.3 million has been returned to investors, adding that the senior helpline gets about 50 calls per day from investors ranging in age from 22 to 102.
Understanding the Decision Maker Panel
The panel discussed aging clients’ decision making and the evolvement of our understanding of that decision making due to new scientific advancements. Surya Kolluri, Bank of America Merrill Lynch, described his firm’s partnership with industry experts and institutions, like the Stanford Center on Longevity, to better understand the aging client and develop training materials for advisors. AARP’s Deb Whitman emphasized AARP’s efforts through their BankSafe initiative that provides financial institutions with tools to protect consumers from financial exploitation and help safeguard savings.
Academic/Scientific Keynote Address
Dr. Mark S. Lachs, M.D., New York Presbyterian Health System and Weill Cornell Medical College, drew attention to the science of aging and geriatric medicine, the relationship between money, health and aging and how age is associated with financial vulnerability. He affirmed that financial resources and health are highly related. Dr. Lachs stated that financial exploitation is the most common form of elder abuse: 5% annually for those over age 60. He advised that responsible professionals should train people to interact effectively with older adults and create relationships with geriatricians. Dr. Lachs concluded that a collaborative effort between the most trusted professionals in the life of an older adult and their family members will help avoid exploitation.
Regulatory and Legislative Update Panel
This panel reviewed the current regulatory and legislative structure surrounding senior investor protections and the ongoing challenges regulators and financial services professionals face. Andy Blocker, SIFMA, stated that the Financial Industry Regulatory Authority, Inc. (“FINRA”) had filed with the Securities and Exchange Commission (“SEC”) a proposed rule change to: (1) amend FINRA Rule 4512 (Customer Account Information) to require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person for a customer’s account; and (2) adopt new FINRA Rule 2165 (Financial Exploitation of Specified Adults) to permit members to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers. Blocker added that the Senior$afe Act is moving through congress and the Elder Abuse Prevention and Prosecution Act was introduced earlier this year.
Kevin Goodman, SEC, stated that the senior population is growing exponentially and the group needs to be addressed about protection. He noted the Commission’s ReTIRE Initiative, which is a targeted examination program looking at some of the challenges facing retail investors. Michael Rothman, NASAA, described their Coordinated Exam initiative and NASAA model Report & Hold Act. He further noted that it was important for NASAA to, “try to achieve uniformity.” Rothman emphasized the importance of training for client-facing representatives and associates.
Ask the Regulator and Industry Experts Panel
The panel facilitated a dialogue regarding importance of the industry and regulators working together on senior investor protection issues. The panel discussed how financial advisors are increasingly finding themselves confronting potential senior financial exploitation, fraud or cognitive issues with their clients. The panel discussed how to identify red flags when there is no face-to-face contact with the client, and Suzanne McGovern, SEC, highlighted that firms are beginning to look at IP addresses and asking questions like, “does the client sound like they are 80 years old?” Ron Long, Wells Fargo Advisors, added that firms are going to need new technology to stay ahead of the exploiters.
For more information on this event, please click here.