What INVESTMENT ADVISORS need to know about the Safe Senior Act of 2016!

The Safe Senior Act of 2016, H.R. 4538, was unanimously approved by the House this week following last month’s approval by the House Financial Services Committee. This is important news for investment advisors, who are often the first to suspect and witness financial abuse of seniors.

1. The passage addresses the loopholes in the Health Insurance Portability and Accountability Act (HIPAA) that left investment advisors open to liability claims for possible privacy violations if they shared financial information when they reported suspicion of abuse of their senior client’s finances.
2. To gain immunity, advisors will need training on how to identify and report suspected abuse or exploitation to law enforcement or regulatory authorities. Training also includes additional privacy training and should occur within one year of working with senior clients.
3. Elder abuse and exploitation typically involves a senior’s close relative, friend, or caregiver. Others who may exploit elderly people include neighbors, attorneys, bankers, agents, doctors or nurses, or pastors. In limited cases, the person is a stranger who befriended a vulnerable senior.

Insurance carriers and financial institutions will begin to roll out training options and requirements, as well as outline exploitation signs to look for when working with seniors.

Senior exploitation is defined in the Act as the “fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that –

• uses the resources of a senior citizen for monetary personal benefit, profit, or gain;

Or

• results in depriving a senior citizen of rightful access to or use of benefits, resources, belongings or assets;

Everyone can help stop Elder Abuse of their relatives, friends, and neighbors by recognizing these signs:

• Attempt to take control of a person’s money, banking, or personal property through theft or by convincing or coercing a senior to sign a power of attorney.
• Threats made against the senior if they do not comply.
• Physical evidence (bruises, broken bones, weight loss, sores), or emotional evidence (withdrawn, fearful)
• Advisors should report signs of predatory lending (pressure to take out loans, title loans, reverse mortgages), predatory annuity sales (pressure to use equity to obtain costly annuities that don’t mature until the senior may be in their late 90’s or over 100 years of age), or other investment plans that don’t make sense.