FINRA Announces Report on its “Securities Helpline for Seniors”

Over the last couple of years, we have seen a variety of laws and regulations designed to protect vulnerable adults/senior citizens. The older I get the more I prefer the emphasis on vulnerability rather than age alone, but I suppose that is the point. Many of us don’t know when we have become vulnerable to predatory practices when we might not have been in the past.

FINRA’s December 30, 2015 press release indicates that its Securities Hotline for Seniors fielded more than 2,500 calls since it was launched in April 2015. It reports that nearly $750,000 was recovered in “voluntary reimbursements from firms” since that time. FINRA’s Executive Vice President for Regulatory Operations, Susan Axelrod, is quoted as saying, in part, that the helpline has “served as a tremendous source of information as we actively engage with seniors, learn of and respond to issues they are experiencing, and use this real-time intelligence to inform our regulatory programs and provide effective practices to firms.”

From a compliance perspective, it is interesting to see that the report identifies strong policies and programs of one firm to serve as a model for others, though the size, client profile, product offerings, complaints training and other factors are listed as examples of bases that could inform what programs and controls are put in place at any particular firm. The “strong policies and programs” were identified as:

  • adopting mandatory annual training for all employees to help them recognize elder abuse and steps to take when abuse is suspected;
  • establishing a specialized, centralized unit that coordinates the firm’s responses and client defense strategies for complex senior issues and serves in an advisory capacity across the firm for registered representatives who have concerns and questions about senior issues;
  • publishing and distributing client-focused educational materials to help investors protect themselves from possible scams;
  • hosting symposiums across the country with experts addressing issues that impact older Americans; and
  • joining industry groups focused on combating elder abuse, which has increased the firms’ protections through information sharing among industry peers.

While there was no specific reference to insurance products in the release, these policies and programs would likely be considered “strong” in our regulatory world as well. Of course, as always, we recommend only adopting those policies and procedures that can actually be implemented, followed and overseen. It is often worse to have policies that are not followed than not to have any at all. That should not be a deterrent to putting them in place, but it should be a strong recommendation to think carefully about the measures that make sense based on the specifics of your firm.