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Schulfer & Associates, LLC

Protection and Trust

Financial exploitation of seniors and vulnerable adults is matter of great concern for Schulfer and Associates, for LPL and the financial services industry in general. FINRA has taken steps to help firms address these concerns and to provide resources to better protect you, our clients. Trusted Contact information provides us with a person designated by the client as a point of contact if we have concerns about financial exploitation. The Trusted Contact person can also be a valuable resource to the advisor, even when there is no concern for financial exploitation. The Trusted Contact person can act as a resource to assist us if we are unable to reach our client after multiple attempts, or if we have concerns about our client’s health or mental capacity.  

 

In December 2017, our clients received a request to provide trusted contact information. Additionally, there was an amendment to the existing account agreement related to LPL reporting exploitation of seniors and vulnerable adults to authorities, and related holds on disbursements, transactions, or transfers. Effective February 5, 2018 and pursuant to FINRA Rule 4512, all firms have an obligation to make a reasonable effort to ask for trusted contact information when opening a new, non-institutional account.  Providing the information is still voluntary on the client’s part and accounts without a trusted contact will not be negatively impacted.

 

So why is all of this happening? We may be able to offer a clearer explanation by way of an example. We have all seen stories of seniors being taken advantage of. In the past, unless we had clear, written permission to reach out to a client’s friend or family member, we could not contact them to express our concerns. We could counsel our clients, ask questions, make our reservations and doubts clear, and document all of these conversations, but could not stop them from making potentially disastrous moves with their money. This happened to a valued client of ours recently. After decades of working, saving and investing, they were ready for retirement. Sadly, they retired without their spouse, who had pre-deceased them some years earlier, (this is an important element of the story, as you will see). Everything was set; the plan laid out, the accounts set up. Shortly into retired life we started to receive requests for large distributions, $10,000, $15,000, etc. While it’s common that people want to address some of those large projects early into retirement, (fix the roof, build a deck, etc.), these requests were beyond what was discussed in the planning stages. When asked in person, the client explained that they had a “friend” who needed money for a young relative’s surgery overseas. This evolved into stories about the “friend” being in construction, was awaiting a big payoff from a building job, and would be coming back home to even things up re: the “loans”. It went further; the “friend” was going to come home to marry the client, (in reality they had not even met – we were lied to about that). By now you should be feeling pretty queasy – but this happened! All we could do was constantly discourage the moves, ask for proof of the “friend’s” claims, and explain how our client’s future was in danger of irreparable damage. Eventually their family did step in as they realized something was wrong, but it was too late to prevent dire results. Had we the permission in the beginning to establish a trusted contact our client’s life would not be changed forever, as it is now.  Please understand that this was an educated, intelligent, experienced, (albeit lonely), person who was preyed upon. We share this story to address the, 
“Well, this can’t happen to me!” response.

 

We hope this clarifies some of the information you have been receiving re: your accounts, and will help you make a decision to protect yourself. Please contact us with questions about our Trusted Contact form, and other ways to ensure a safe experience with us. We value your relationship and your trust, and will always look for ways to protect both.

 

As an added source of education on scams and how to avoid them, please see the link below from the State of Wisconsin.

 

https://datcp.wi.gov/Documents/SeniorGuide170.pdf