Advisor Today - November/December 2016 - 45

NAIFA GOVERNMENT RELATIONS

By Michael Hedge and Steve Klein

Protecting Seniors from Financial Scams
NAIFA is working with lawmakers to clarify your obligations as you protect your senior clients from
financial exploitation.

F

ederal and state legislators are
working hard to pass laws that
will clarify your obligations as an
advisor when determining the steps
to take to protect your senior clients
from financial exploitation.
In June, the U.S. House passed
its version of the Senior$afe Act of
2016. The bill was introduced as
a companion bill to S. 2216. It is
an attempt to increase protections
for senior Americans susceptible to
financial and investment fraud.
It provides that a supervisor,
compliance officer or legal advisor
for a covered financial institution
who has received training regarding
the identification and reporting of
the suspected exploitation of a senior
citizen (at least 65 years old) shall
not be liable for disclosing such
exploitation to a covered agency if such
individual made the disclosure in good
faith and with reasonable care; and a
covered financial institution shall not
be liable for such a disclosure by such
an individual if such individual was
employed by the institution at the time
of the disclosure and the institution
had provided such training.
NAIFA's amendment
The bill sponsors worked extensively
with NAIFA on an amendment
to the bill that would extend
liability protection to the registered
representatives of broker-dealers.
The NAIFA-backed amendment was
accepted by a vote of the Financial
Services Committee and helped ensure
that support of the bill was unanimous.
NAIFA Government Relations is
now working with Senate sponsors
to further amend the language
contained in the Senate version to
fully include registered representatives
and insurance producers, ensuring
that all NAIFA members who work
directly with clients are covered by the
provisions of the Senior$afe Act.

NAIFA Government Relations is working with Senate
sponsors to ensure that all NAIFA members who work
directly with clients are covered by the provisions of the
Senior$afe Act.
Along with Congress, FINRA is
proposing a regulation to address
this issue of senior protection as
well. FINRA issued Regulatory
Notice 15-37 to solicit feedback
on proposed rules addressing the
financial exploitation of seniors and
other vulnerable adults. One proposed
new rule would permit firms to place
a temporary hold on a disbursement
of funds or securities when there
is reasonable belief of financial
exploitation and to notify a designated
trusted contact of the temporary hold.
What states are doing
At the state level, a number of states
have considered or enacted laws
intended to protect seniors from
financial exploitation. The state
proposals call for financial advisors and
their firms to report suspected financial
exploitation of one of their senior
clients to state authorities who can then
conduct an investigation. The state laws
also allow the firm to place a temporary
hold, usually up to 10 business days,
on the client's requested transaction if
attempted fraud is suspected.
NAIFA's position
While NAIFA does not oppose these
bills, the association's position is that
any senior financial protection bill
should incorporate the following:
* Include a voluntary, not mandatory,
reporting process.
* State that advisors report suspected
fraud of a senior client to their firms,
rather than go directly to authorities.
* Ensure that financial advisors are
protected from liability if they report
a senior client's financial information
to third parties in an effort to comply

with the law and protect their client
from financial ruin.
NAIFA has been proactive in
lobbying on these bills where they
are introduced in state legislatures.
This year, NAIFA-Louisiana and
NAIFA-Colorado successfully lobbied
to ensure that senior protection bills
have a voluntary reporting process
and shield advisors from legal
liability for complying with those
laws. And NAIFA-Oklahoma was
able to persuade the State Securities
Commissioner to withdraw a proposed
senior protection regulation to address
concerns raised by financial advisors.
Although Alabama enacted a
senior protection law this session
that requires mandatory reporting of
suspected senior financial exploitation,
NAIFA-Alabama secured a
commitment from the State Securities
Commissioner that concerns raised
by advisors will be addressed in
regulations to carry out the new state
law. Vermont and Indiana passed
similar laws this year. We expect that
more states will consider enacting
senior protection laws of this nature
starting early next year.
NAIFA will continue to work to
amend any legislative or regulatory
senior financial protection proposal
to ensure that the association's views
are incorporated and, importantly,
that regulators and the industry
can take steps to protect vulnerable
seniors from financial scams.
Michael Hedge is director of government
relations at NAIFA. Contact him at
mhedge@naifa.org. Steve Kline is director
of government relations at NAIFA. Contact
him at sklein@naifa.org.
November/December 2016 | ADVISOR TODAY 45



Advisor Today - November/December 2016

Table of Contents for the Digital Edition of Advisor Today - November/December 2016

FROM THE EDITOR
VIEWPOINT
NEW PRODUCTS
I Love My Job, But I Don’t Want to Do it Forever!
Building a Practice You Love
The New American Dream
A New View of Retirement
College Education Funding: Helping Clients Evaluate What’s Best
Portfolio Allocations for New Market Conditions
Leveraging the Power of Study Groups
An Interview with MassMutual’s James Ocampo on Critical Illness Insurance
Start with “Why”
Best Practices for Selling Group LTCI
From Yes to Success
Meet NAIFA’s New President
NAIFA’s 2016 Performance + Purpose Conference
NAIFA GOVERNMENT RELATIONS
4 Ways to Build an Effective Email Marketing System
ADVERTISER INDEX
BACK PAGE
Advisor Today - November/December 2016 - cover1
Advisor Today - November/December 2016 - cover2
Advisor Today - November/December 2016 - 1
Advisor Today - November/December 2016 - 2
Advisor Today - November/December 2016 - 3
Advisor Today - November/December 2016 - 4
Advisor Today - November/December 2016 - 5
Advisor Today - November/December 2016 - 6
Advisor Today - November/December 2016 - 7
Advisor Today - November/December 2016 - FROM THE EDITOR
Advisor Today - November/December 2016 - 9
Advisor Today - November/December 2016 - VIEWPOINT
Advisor Today - November/December 2016 - NEW PRODUCTS
Advisor Today - November/December 2016 - 12
Advisor Today - November/December 2016 - I Love My Job, But I Don’t Want to Do it Forever!
Advisor Today - November/December 2016 - Building a Practice You Love
Advisor Today - November/December 2016 - The New American Dream
Advisor Today - November/December 2016 - A New View of Retirement
Advisor Today - November/December 2016 - College Education Funding: Helping Clients Evaluate What’s Best
Advisor Today - November/December 2016 - 18
Advisor Today - November/December 2016 - Portfolio Allocations for New Market Conditions
Advisor Today - November/December 2016 - 20
Advisor Today - November/December 2016 - Leveraging the Power of Study Groups
Advisor Today - November/December 2016 - 22
Advisor Today - November/December 2016 - 23
Advisor Today - November/December 2016 - An Interview with MassMutual’s James Ocampo on Critical Illness Insurance
Advisor Today - November/December 2016 - 25
Advisor Today - November/December 2016 - Start with “Why”
Advisor Today - November/December 2016 - 27
Advisor Today - November/December 2016 - Best Practices for Selling Group LTCI
Advisor Today - November/December 2016 - 29
Advisor Today - November/December 2016 - From Yes to Success
Advisor Today - November/December 2016 - 31
Advisor Today - November/December 2016 - Meet NAIFA’s New President
Advisor Today - November/December 2016 - 33
Advisor Today - November/December 2016 - 34
Advisor Today - November/December 2016 - 35
Advisor Today - November/December 2016 - 36
Advisor Today - November/December 2016 - 37
Advisor Today - November/December 2016 - NAIFA’s 2016 Performance + Purpose Conference
Advisor Today - November/December 2016 - 39
Advisor Today - November/December 2016 - 40
Advisor Today - November/December 2016 - 41
Advisor Today - November/December 2016 - 42
Advisor Today - November/December 2016 - 43
Advisor Today - November/December 2016 - 44
Advisor Today - November/December 2016 - NAIFA GOVERNMENT RELATIONS
Advisor Today - November/December 2016 - 4 Ways to Build an Effective Email Marketing System
Advisor Today - November/December 2016 - ADVERTISER INDEX
Advisor Today - November/December 2016 - BACK PAGE
Advisor Today - November/December 2016 - cover3
Advisor Today - November/December 2016 - cover4
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