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Avoiding Financial Exploitation of Vulnerable Adults Thumbnail

Avoiding Financial Exploitation of Vulnerable Adults

Doug Garrison, CFP, MBA - Senior Wealth Advisor

You've heard the horror stories. Perhaps you know someone who's been impacted. You think you're prepared to avoid it--but you're fearful it might possibly happen to you.

"It" is being exploited. Being taken advantage of. Being scammed out of your money. Being robbed under the guise of being helped. Or simply losing the capacity to make sensible financial decisions.

An elderly relative begins spending money in unusual ways, paying off debts for a caretaker or other person. A "friend" offers to help a widowed senior manage his checking account, and begins to "help" him pay bills and write checks. A client seems more isolated than in the past, calls the office asking the same question over a period of a couple of days, and requests a significant sum to be moved from her account. A relative of a client contacts an advisor, ostensibly on behalf of the client, and attempts to have client funds transferred out of the client's account.

These are examples of how vulnerable adults can be exploited financially. We think you'd agree that preventing such exploitation is worthwhile.

To address this issue and in response to recent regulatory requirements, Investec and Schwab are undertaking certain actions to make exploitation of vulnerable clients less likely:


Schwab has added a feature that allows account holders to name a "Trusted Contact Person" (TCP). Clients who designate one or two persons as a TCP are simply authorizing Schwab and/or Investec to contact those named individuals if either believes there is reason to be concerned about potential financial exploitation or fraud. If a TCP were contacted, Schwab and/or Investec might inquire about the client's health status, identity of individuals purporting to assist the client, or simply alert the TCP about the concern. TCPs can only give or receive information and cannot make changes or provide instructions on the client's behalf. A TCP should be someone who knows the client and the client's family and is familiar with the client's situation.

To add a Trusted Contact Person to your accounts, you simply complete this form providing contact information for your TCP and for yourself. If you prefer to sign the form electronically, please contact our office.


Recent legislation in Texas authorizes investment advisors like Investec to report, if appropriate, suspected instances of financial exploitation to the Texas Securities Commission and the Texas Department of Protective Services. If such a report were filed, Investec may as well notify a third party associated with the vulnerable client (such as a TCP or other family member) of the suspected financial exploitation. We may also instruct Schwab to place a hold on any transaction that involves the client's account and which we have cause to believe is related to suspected financial exploitation.

The fact that vulnerable adults are exploited financially, and seems to be happening more frequently, is sad. This is an issue which we suspect will gain increasing emphasis as the baby boomer generation continues to age. We believe the best approach to dealing with such risks is to take necessary precautions (such as identifying one or two Trusted Contact Persons for your Schwab accounts) and discussing your personal circumstances with your wealth management advisor. Please feel free to contact us now or during your next review to raise any questions or address your concerns.

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Disclaimer: The information provided here is general and intended as educational in nature. It is not intended nor should it be considered as tax, accounting, or legal advice. Investec Wealth Strategies and its advisors do not provide tax, accounting, or legal advice. We recommend you seek the counsel of your attorney, accountant or other qualified tax advisor concerning your situation.