Ex-Wells Fargo advisor fined over $50,000 fund transfer requested by client with dementia

A former Wells Fargo financial advisor has been fined and suspended after allegedly executing a transaction for an elderly client despite being informed she was no longer able to manage her finances.

Jarrett Thomas agreed to a $7,500 fine and a 45-day suspension following an investigation by Finra.

He neither admitted nor denied the allegations as part of the settlement, according to a Finra letter detailing the settlement dated March 17.

Thomas, who began his career at Wells Fargo Clearing Services in Virginia in 2008, resigned from the firm in June 2023 amid concerns over his handling of the client’s account. He has not been registered with a brokerage or advisory firm since his departure, according to his BrokerCheck profile.

In April 2023, a doctor at the client’s long-term care facility notified Thomas in writing that she had advanced dementia and could no longer make financial decisions, according to Finra. The client’s two Wells Fargo accounts were held in the name of her living trust, with the firm designated as the successor trustee in the event of her incapacity or death.

Despite this, Finra states that Thomas did not report the doctor’s notification to Wells Fargo and, in June 2023, carried out a $50,000 transfer from the client’s account to her external bank, following her oral instructions. Since the client had been deemed incapacitated, she no longer had the authority to authorize such transactions, and Finra alleges that Thomas’ actions constituted an unauthorized transfer.

Thomas resigned from Wells Fargo on June 15, 2023, two days after the transaction, according to Finra. The firm was reportedly unaware of the client’s incapacity until after his departure.

In an August 2023 regulatory filing, Wells Fargo provided further details on Thomas’ resignation, stating that he had been “the subject of an internal review into allegations that he ‘took instructions from an unauthorized third party, failed to maintain accurate books and records, and failed to disclose an outside activity.’”

Thomas's suspension adds to the disheartening history of advisors reportedly falling short of their obligations to properly serve clients as they go through cognitive decline. In one case, the family of an elderly JPMorgan client sued the firm, alleging its failure to push him out of complex, inappropriately risky investments led to the decimation of the family fortune once estimated at $50 million. Another Finra case in 2018 revolved around a former broker with Vanderbilt Securities, who was barred from the industry after a finding that he churned a senior client's account for four years, leading to $723,000 in losses.

With 30.4 million Americans set to turn 65 by the end of the decade, advisors would do well to get ahead of the financial and fiduciary risks that come with clients' potential cognitive decline.

According to the Alzheimer's Association, 6.9 million Americans aged 65 and older were living with Alzheimer’s disease, the most common form of dementia, in 2024. That number is expected to rise to nearly 13 million by 2050 as the population ages. The association's latest projection pegs the total cost of care for individuals with Alzheimer’s will reach $360 billion in 2024, with Medicare and Medicaid representing nearly two-thirds of the expenses.