Who is your trusted contact person?

 
“Ensuring Canadian investment firms and their advisors have regulatory certainty will help them do the right thing – because Canadian investors want this level of protection, and advisors as well as firms want to be able to offer it.”

One in five older Canadians is subject to elder financial abuse and every six minutes, a Canadian is diagnosed with dementia – this according to CARP, the country’s largest advocacy association for older Canadians. However, financial vulnerability is not necessarily linked to age. Anyone – a parent, sibling, neighbour, colleague – can become vulnerable at any age because of trauma, a major life change, or a medical condition. Additionally, those with less financial literacy or knowledge are often vulnerable.

For these reasons, Canada’s investment watchdog is moving to enhance how it protects vulnerable investors. A recent survey commissioned by the Investment Industry Regulatory Organization of Canada (IIROC), shows wide public support for measures to protect vulnerable investors. Out of the 1,000 Canadian investors surveyed, 92 per cent agreed that having tools like a “trusted contact person” are necessary. 

Giving the name of a trusted contact to your financial advisor is one of the ways investors can protect themselves. This trusted contact is the person your advisor is authorized to reach out to if they suspect financial exploitation or believe your judgement may be impaired – for example, your trusted contact could be asked if they are aware of any changes in your life that might influence your financial actions or behaviours.  

For Andrew J. Kriegler, IIROC’s President and CEO, the survey results show an encouraging amount of support from Canadians for regulatory measures to safeguard vulnerable investors. “Ensuring Canadian investment firms and their advisors have regulatory certainty will help them do the right thing – because Canadian investors want this level of protection, and advisors as well as firms want to be able to offer it.”

Seniors’ advocates echo this sentiment. “We need to find ways to allow the financial industry to report suspicious wrongdoing against vulnerable investors,” says Laura Tamblyn Watts, national elder law expert.

Of those investors surveyed by The Strategic Counsel on behalf of IIROC, less than a quarter said they had already provided their advisor with a trusted contact but 71 per cent said they would do so if asked.

This is why IIROC continues to work with its regulatory partners on next steps to create rules that would better protect both seniors and vulnerable investors, and to develop information resources for investors and advisors.

“We need to take the time necessary to strike the right balance, giving these issues careful thought and consideration,” says Kriegler. “It is important to set up a clear, transparent process so Canadians and advisors understand how the rules would be used.”

In the meantime, Kriegler encourages Canadians to meet with their financial advisors to set up a trusted contact for their accounts. “It’s something that can be done right away and will add a measure of protection in case you find yourself in a financially vulnerable situation.”

Investors who do not yet have an advisor but are looking for one can visit IIROC’s AdvisorReport, a database of important background on all advisors registered with IIROC, including their qualifications, employment history and any record of IIROC discipline.