Who Can You Trust?

As our population ages, we continue to see a higher incidence of reduced cognitive ability.  As fiduciaries, we are sensitive to this issue and look for red flags if we suspect diminished capacity or exploitation, particularly with regard to our senior clients.  To address this, we have partnered with Schwab to obtain a “trusted contact” for each of our clients.  If you do not have trusted contact information on file with Schwab, we will be sending out forms to add this information to your account with the year-end statements. We strongly encourage all our clients to have trusted contact information on file with Schwab as an added layer of protection against financial exploitation.

What is a Trusted Contact?

According to Schwab, “a Trusted Contact is designated by your client. This person gains authorization to speak on your client’s behalf with you and Schwab to:

  • Confirm your current contact information
  • Discuss your mental or physical health status
  • Discuss activities or other possible red flags that might indicate you are being financially exploited
  • Address other limited circumstances when permitted by law”

Clients typically name a spouse or a child as their trusted contact, but a trusted contact can be anyone you trust (such as your attorney or a close friend) to assist Schwab in the event they suspect exploitation. Schwab recommends the trusted contact be someone not already authorized to conduct

Why does Schwab request a Trusted Contact?

Financial exploitation crime continues to rise, and seniors are often targeted by these schemes. In addition, several state laws have been passed recently requiring financial institutions to have procedures in place to identify and stop exploitation if they suspect it. FINRA has also passed rules requiring broker-dealers to make efforts to obtain trusted contact information for every client.

What happens if Schwab suspects exploitation?

In the event potentially fraudulent activity is flagged on your account, Schwab’s Senior and Vulnerable Investors Investigation team will conduct research to determine the next steps. This includes contacting your trusted contact. If appropriate, the team may place restrictions or a hold on the account or add additional monitoring.

Is a trusted contact the same as a Power of Attorney?

No. Trusted contacts cannot act on your behalf. They are unable to view your account information, make transactions in your account, or ask about account activity. If you desire to add a Power of Attorney to your accounts, in addition to a trusted contact, let us know.

If you have any questions on trusted contacts, don’t hesitate to reach out to us!