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Conflict erupts when a client’s family demands financial info

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Q: The niece of one of my elderly clients called me recently to ask about her aunt’s account. She was concerned that her aunt’s caretaker was stealing money from her. Unfortunately, since she wasn’t listed as someone I could give information to I had to decline. She went on a tirade and made a huge stink about it.

As it turned out, my elderly client later told me she didn’t trust her niece and thought she had stolen from her in the past. Was there anything I could have done differently to have avoided the confrontation with the niece?

A: It sounds like you did the right thing. I’m not sure if there would have been a better way to handle. FINRA Rule 4512 (Customer Account Information) requires members to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening an account or when updating account information.

If the niece was not a joint account owner and was not otherwise listed as a “trusted contact,” you were absolutely right to decline to give her any information. If the niece was truly concerned for her aunt’s finances, you could have perhaps suggested that she contact FINRA's Senior Helpline. Or maybe have her come in with her aunt and conduct a three-way conference call, where you could have the benefit of the aunt’s permission to speak with the niece.

But of course, someone who is taking advantage of an elderly person is not going to be amenable to any scenario that would allow you to verify their authorization and they will make a scene no matter what you suggest because that’s the last thing they want you to do.

Obviously elder fraud is a serious and growing problem and there are many relatives and friends who are rightly concerned about the well-being of their loved ones. But there is a delicate balance between seeking to protect elderly customers and respecting their privacy rights and someone with a legitimate concern should be willing to take the extra steps necessary to ensure that their loved one approves of you speaking with them about their finances.

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