Financial Services Institute: OneVoice 2014

How to take action with vulnerable clients

Feb 19, 2014 @ 12:00 am

Runtime: 2:14

Noticing a red flag on an account should prompt advisers to act, says Amy Rush, senior regulatory counsel and vice president at Waddell & Reed. Here are some tips for what to do next.

The Financial Services Institute's annual broker-dealer conference, taking place January 27-29 in Washington, D.C.

Video Transcript

A lot of advisers probably feel that they can't report these issues or reach out to beneficiary to check on the red flag that they've noticed because of privacy loss, and that's a [unk] I think. The privacy loss do serves a purpose. But this privacy loss does not tell us that we can't reach out to a beneficiary that's listed or two next of kin that we know. And tell them, we're seeing a red flag. This is-- we have your vulnerable adult as a client. We have an account-- they have an account here. We see red flags in the account. We're not mentioning the account number. We're not mentioning social security number. We're not mentioning how much money is in the account or merely mentioning that we're seeing red flags. And we're allowed to do that under Reg S-P. We're also allowed to do that under a new guidance from inter-agency report that was put out in 2013 from many of the agencies, the CFTC site is where you can find that inter-agency report. So, if I were a financial adviser and I was reaching out to a daughter who either had power of attorney or did not vary separate cases. If there's a power of attorney I am allowed obviously to contact her and tell her, look, we have an account. We have a problem and we think that it might be an immediate POA. So we still have the account holder involved. It's the vulnerable adult and we have the daughter as the POA, but she's having trouble. So we try to reach out and help her and say, "Look, these are the red flags. Let's put some protections in place. Maybe you want to make sure that you have a guardian ad litem-- appoint it to the adult. Or you wanna reach out and get a power of attorney that is just you in charge not her and you." It's not a joint power at all. Those are things that we can do. If we have an adult that does not have a power of attorney, what we can do is reach out to a beneficiary or reach out to [unk] and suggest, look this is our client. They have assets and management with us. We're concerned, we've see some red flags. We're wanting to help you help that adult and what we need is a power of attorney put in place or guardian ad litem put in place and then we can better facilitate the account for the adults and make sure that they're not a target of abuse.


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