ADDITIONAL STATES IMPLEMENTING ‘REPORT AND HOLD’ STATUTES FOR ADVISORS
Financial advisors and broker dealers are often the first to identify potential cases of elder financial exploitation. Federal regulators, including FINRA (Financial Industry Regulating Authority), the SEC (Securities and Exchange Commission), the CFPB (Consumer Financial Protection Bureau), and the NASAA (North Atlantic Securities Administrators Association) recognize this and have provided guidance or passed rules that encourage or require reporting of suspected elder financial abuse. State governments, too, are making changes to their current regulatory regimes to respond to the enormous losses associated with the exploitation of seniors and vulnerable adults. New Hampshire is one state that recently adopted such legislation. The bill which took effect Sept. 8, is quite similar to FINRA Rule 2165, and permits broker-dealers and investment advisors to delay disbursements from accounts when they have reason to believe the request may result in financial exploitation. California also passed legislation this month targeting financial abuse of elder and dependent adults. The new law, Cal. Wel. & Inst. Code § 15630.2, now requires broker-dealers and investment advisers to report suspected financial abuse of covered persons. Consistent with statutes enacted in other states, California’s statute enables broker-dealers and investment advisers to delay disbursements or transactions in certain cases—if certain conditions are met. The new law also enables broker-dealers and investment advisers to disregard powers of attorney when they believe the agent or attorney in fact is the suspected exploiter—if a report has been made under the statute. The new law will become effective in 2020. For a clickable map that outlines state reporting requirements for financial services professionals, click here.