Why You Should Have a Trusted Contact
Cases of financial exploitation and fraud have been on the rise in recent years, with senior citizens more vulnerable. To counter this sad reality, a new regulation by the Financial Industry Regulatory Authority (FINRA) requires financial professionals and planners to ask their clients to nominate a Trusted Contact person for their accounts. It is not mandatory to choose a Trusted Contact, and the financial professionals’ obligation is only to ask you if you wish to provide the information.
However, having a Trusted Contact can be a financial decision worth making. It can prove to be a valuable tool to have on hand should the need for its use arise and helps you protect your investments.
What is a Trusted Contact?
A Trusted Contact is like your emergency contact; only this time, he/she is contacted by your financial firm in limited circumstances. For example, if your financial firm cannot reach you for an extended period or has concerns about your health and well-being.
Your Trusted Contact person cannot act on your behalf and has no authority over your money and investments. As your financial planners, we will not share your account balance or any other information about your accounts, investments, or assets with your designated Trusted Contact.
Why Choose a Trusted Contact?
As we have indicated earlier, having a Trusted Contact is a protective measure. Your financial professionals are authorized to contact your Trusted Contact if they have reason to believe you might be financially at risk. For instance, if we suspect possible fraud of financial exploitation to your account, your trusted contact can help us respond to this issue and ensure your assets are protected. Financial firms can now hold on cash and securities from your account if they suspect foul play such as unusual account activity or suspicious transactions and withdrawal that point to financial exploitation.
We can also reach out to your trusted contact to confirm your whereabouts if we have trouble reaching for an extended period. He/ she can help confirm if your contact information and address are correct. Similarly, we can approach your trusted contact to verify your health status and well-being if we have reason to believe that health issues may be affecting your ability to make sound financial decisions.
If we cannot reach you, we can also contact your trusted contact to verify the capacity and identity of any trustees, executors, holders of power of attorney, and legal guardians to your account.
Who Should Be Your Trusted Contact Person?
The answer to this question seems obvious; your trusted contact should be a person you trust completely. It can be your spouse, child, or friend. However, before naming a trusted contact, you should consider some factors. Do not choose your spouse simply because he/she is your spouse. How financially savvy is that person?
You may trust your sibling or child more than you trust anyone else, but a friend who you also trust happens to be more knowledgeable about investing and financial matters. In this case, the friend may be a better choice for your trusted contact.
As the adage goes, money never builds character; it only reveals it. Therefore, your trusted contact should be the person you believe will act in your best interests. They should be able to respect your privacy when privy to confidential information about your investments. Since the whole point of having a trusted contact is to ensure your account is more protected, it is advisable to appoint someone who is not already authorized to act on the account, such as the holder of the power of attorney, joint account holder, or trustee.
After choosing your trusted contact, you should inform them that they are now listed as your Raymond James Trusted Contact. You can also inform your family members who your chosen trusted contact is. This can serve as a deterrent to any member who might think of taking advantage of you, for they’ll know there is someone now watching out for you.
Bottom Line
Your trusted contact is your ally. Please consider appointing a Trusted Contact to your account and take a step to further protect your financial future. Do not hesitate to give us a call if you have any questions or concerns.