A trusted contact person: Enhancing your financial protection as you age
By James MacTavish
For those who invest with a financial institution or firm, you now have the ability to provide your registered advisor with a contact person that you trust. This person can play an important role in protecting your financial assets in certain circumstances.
Advisors are required to take reasonable steps to obtain the name of someone you would like to have as your Trusted Contact Person (TCP), should they suspect you are experiencing financial exploitation or diminished mental capacity.
What is a Trusted Contact Person?
As you age, you may experience a decline in your health and cognitive abilities due to medical issues, pre-existing conditions or the natural aging process. In these circumstances, you may become more reliant on others in making financial decisions, potentially exposing you to financial abuse and fraud by those who do not have your best interests at heart.
To help safeguard potentially vulnerable clients from financial abuse and exploitation, the Canadian Securities Administrators, of which the Alberta Securities Commission is a member, introduced the TCP. A TCP is someone you can have listed on your account informing your advisor of who you trust and who they can contact in limited circumstances. This could include:
- If you are unable to be reached
- If your advisor has concerns you are vulnerable and being financially exploited
- If you are having a health issue and your advisor needs to confirm your wellbeing
- If your advisor needs confirmation of your legal representative
For example, your advisor may contact your TCP when they cannot reach you because you have taken an extended vacation and forgot to inform them. Or, in more sensitive situations, your advisor may contact your TCP to ensure the validity of a request that they believe is out of character.
What can and can’t my Trusted Contact Person do?
A TCP’s sole purpose is to help safeguard your financial assets by being an additional resource to help your advisor make decisions that best protect your account. Your TCP:
- cannot authorize transactions on your behalf
- cannot make decisions on your behalf
- will not be given access to your detailed account information
Who should be your Trusted Contact Person?
A TCP should be a mature family member or friend who you trust, and you should feel comfortable that they can handle difficult conversations about your personal situation if they arise. Consider choosing someone you know will protect your interests, is familiar with your support network, and is not typically involved in your financial decisions. You should also ensure the person you select agrees to take on the role and is comfortable talking to your advisor.
The Alberta Securities Commission (ASC) reminds older Albertans to work with their advisor to put a TCP in place. In a recent study conducted by the ASC nearly 60% of Albertans aged 65 and over were approached with what they felt was a possibly fraudulent investment. While naming a TCP on your account is optional and not a legal process, it can provide you valuable peace of mind knowing that your advisor has someone you trust to help safeguard your financial assets now and in the future.
This article was originally published on the Alberta Securities Commission’s (ASC) investor education website CheckFirst.ca. The ASC is the regulatory agency responsible for administering the province’s securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada’s capital markets.
