How often do you think about your future self? As financial planners, we spend a lot of time thinking about the future.
Part of financial planning is looking ahead for potential issues and finding solutions before problems even occur. This includes financial vulnerability that could arise from diminishing capacity, grief, illness, or other trauma.
We have a client service feature that may be a benefit. During your upcoming review meeting, we’ll ask you whether you would like to provide the name and information of a trusted contact.1 This person is someone we can contact if we suspect an investor, is making an “unusual financial decision” or appears to be suffering a notable cognitive decline.4
Why is setting up a trusted contact so important? While no one wants to think ill of someone they know and love, the reality is that seniors have lost an average of $50,200 each time a “known person” commits elder fraud exploitation. And according to the IRS, seniors are more likely to be victims of financial scams than any other age group.2,3
Why now? Regulators now require that investment firms make reasonable efforts to ask the name and contact information of a person you trust. You don’t have to choose a trusted contact, but it may offer some advantages. We ask this question with your best interest in mind — and to lower the risk of someone attempting to make financial decisions on your behalf.1
What can a trusted contact do?
- Discuss the status of your mental or physical health.
- Discuss behaviors or possible red flags that might indicate you’re being financially exploited.
What can’t a trusted contact do?
- Has no authority over your money.
- Can’t make decisions on your behalf.
- Can’t access your account balance, account activity, or other account information.
- Can’t change your account information, contact details, or other account elections. (This includes nominating, updating, or removing other trusted contacts.)
Who should your trusted contact be? At first thought, the answer seems obvious: the person who you trust the most. Yes, that person may be one of the best choices — but keep some factors in mind.
Ideally, your trusted contact is financially savvy, or at the very least, has some basic financial knowledge. You may trust your spouse, your sibling, or one of your children more than you trust anyone else, but how much does that person know about investing and financial matters?
You should feel confident that your trusted contact will behave ethically and respect your privacy. This person may be given confidential information about your investments.
It’s also a good idea that your family members know who your designated trusted contact is. That way, any family member who might be tempted to take advantage of you knows another family member is looking out with your best interest in mind.
Your trusted contact is your ally. Think of your trusted contact like a safety net. If you’re being exploited financially or could be at risk of such exploitation, that person will be notified and called to action.
Still feeling unsure on who to pick? Please give us a call if you’d like guidance during this process. We’re here to help you choose the best person for you.
Your Eagle Wealth Team