Provincial and territorial securities regulators are raising alarm bells over a spike in reports of financial abuse against Canadian seniors. What is most shocking is that it is often happening within families.
The increase can mostly be attributed to an influx of baby boomers entering their golden years and longer life expectancy.
The latest census from Statistics Canada shows the number of Canadians aged 55 to 64 has surpassed Canadians aged 15 to 24 for the first time ever, and the number of people over 85 is expected to triple over the next 25 years.
To help stem the tide, the Canadian Securities Administrators (CSA) is calling on registered financial advisors to request clients provide a Trusted Contact Person (TCP) to contact if they have concerns about a client’s ability to make financial decisions, or if advisors suspect a client is being exploited.
The CSA has also given advisors the power to place temporary holds on transactions if they suspect a client is suffering from dementia.
The CSA does not have the authority to require advisors or clients to establish a TCP, and that’s why they are appealing to both parties to step up.
Selecting a Trusted Contact Person
According to the Ontario Securities Commission (OSC), a TCP should be an individual the client trusts.
There is no minimum age requirement but it should be someone that is mature and able to engage in potentially difficult conversations about the client’s personal financial situation.
To avoid potential conflict, consider selecting a trusted contact that is not a beneficiary.
Being named a trusted contact does not give that person access to the client’s account.
Older Canadians also have the option of designating a power of attorney (POA), which is a legal document that gives one or more people the authority to manage a person’s money and property if a doctor determines that person is unable to for mental or physical reasons. Clients are under no obligation to appoint a POA when dealing with financial advisors.
Many older Canadians, however, don’t have a POA or even a financial advisor. That puts the onus on them to take measures on their own.
Here are some suggestions from the Nova Scotia Securities Commission to prevent financial elder abuse:
- Ensure your financial and legal affairs are in order, and documents are up to date
Check all accounts regularly to make sure they are not being accessed without your knowledge, and legal affairs such as power of attorney are up to date.
- Keep extra copies of a paperwork you sign
Be sure you understand any financial documents you are signing and keep copies in your personal files. It helps to include the signature of a witness.
- Open all your mail and review all statements personally
Don’t leave vital financial information for someone else. If you have questions or don’t understand something, ask your advisor, bank or lawyer to explain.
- Don’t let family or friends pressure you into financial decisions
In some cases, elder abuse is being committed by family members or friends. You have the final say in matters that impact you. Consider obtaining independent legal advice when lending money, transferring ownership of property, reviewing your will and dealing with matters relating to caregiver arrangements.
- Fully understand any power of attorney agreements before signing
Make sure you know what power you are giving and who you are giving it to, and know the process and procedures for rescinding the agreement.