The House is expected to vote on reconciliation of the Senior Safe Act as part of its larger financial services reform package next Tuesday, moving legislation designed to encourage advisors to report senior financial abuse that much closer to reality.
The law would encourage advisors and their firms to report the financial exploitation of senior clients—said to cost senior investors some $3 billion annually—by protecting them from liability and the violation of privacy laws.
The Senate passed the Senior Safe Act in March as part of a larger financial services overhaul, following a similar move by the House of Representatives. The bills must now be reconciled in order to get to President Donald Trump’s desk for signature.
“SIFMA supports the Senior Safe Act, which will allow firms to disclose cases of potential senior financial exploitation to the appropriate entities without fear of legal ramifications,” Lisa Bleier, managing director and associate general counsel of the Securities Industry and Financial Markets Association (SIFMA), told Financial Advisor Magazine.
“We are encouraged this legislation is advancing and urge Congress to move it forward to become law,” she said.
In addition to granting legal immunity to those who report suspected abuse of seniors to regulators and law enforcement authorities, the new legislation encourages financial services firms to provide standardized training to frontline employees and producers to help them identify and report instances of suspected abuse.
The bill was introduced by Rep. Bruce Poliquin (R-Maine) and modeled on the “Senior$afe” program in Maine—a collaborative effort between state regulators, financial firms and legal organizations to educate banking and credit union workers on how to spot and help stop elder financial abuse. Hundreds of Maine financial services professionals have been trained to identify the signs of elder financial abuse.
“The Senior Safe Act is a big step forward in the prevention of elder financial abuse by allowing financial services firms and advisors to report potential financial abuse without fear of violating privacy laws,” Financial Services Institute (FSI) President and CEO Dale Brown said.
By granting immunity, the bill would enlist advisors, who are on the frontlines of the fight to help stem the rising tide of financial fraud against seniors, Brown said.
U.S. seniors lose an estimated $2.9 billion each year to financial fraud, according to a MetLife study.
On average, senior fraud victims are chiseled out of $30,000 each, and 10 percent lost $100,000 or more, a separate study by Allianz found. The Allianz study also reported that seniors who regularly speak about their finances with trusted third parties, including financial professionals, are significantly less likely to be fraud victims.