Senior Investors

FINRA views the protection of senior investors, as well as baby boomers who are retired or approaching retirement, as a top priority. Because a large number of American investors are approaching retirement and control a substantial portion of investment assets, FINRA encourages firms to review and, where warranted, enhance their policies, procedures and practices, in light of the special issues common to many senior investors.

For example, a firm's procedures and controls should take into consideration the age and life stage (whether pre-retired, semi-retired or retired) of their customers. Of particular concern to FINRA is the suitability of recommendations to senior investors, communications targeting older investors, and potentially abusive or unscrupulous sales practices or fraudulent activities targeting senior investors.

Financial Exploitation of Seniors

With the aging of the U.S. population, financial exploitation of seniors is a serious and growing problem. FINRA’s Securities Helpline for Seniors® has highlighted issues relating to financial exploitation of this group of investors, including the need for members to be able to more quickly and effectively address suspected financial exploitation of seniors and other specified adults.

FINRA rules provide members with ways to respond to situations in which they have a reasonable basis to believe that financial exploitation has occurred, is occurring, has been attempted or will be attempted. Members can better protect their customers from financial exploitation if they have the ability to contact a customer’s designated trusted contact person and, when appropriate, place a temporary hold on a securities transaction or disbursement of funds or securities from a customer’s account.

  • 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 of a non-institutional customer’s account or when updating account information for a non-institutional account. The trusted contact person is intended to be a resource for the member in administering the customer’s account, protecting assets and responding to possible financial exploitation.
  • FINRA Rule 2165 (Financial Exploitation of Specified Adults) permits, under FINRA rules, a member that reasonably believes that financial exploitation has occurred, is occurring, has been attempted or will be attempted to place a temporary hold on a securities transaction or disbursement of funds or securities from the account of a “specified adult” customer. Specified adults include a natural person age 65 and older or a natural person age 18 and older who the member reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests.

Related:

Events and Training

FINRA Examinations

FINRA’s exams focus on a broad range of topics relating to the protection of senior investors, including:

  • the types of securities and suitability of securities sold to senior investors
  • training of firm representatives with regard to senior specific issues and how firms address issues relating to aging (e.g., diminished capacity and elder financial abuse or exploitation);
  • use of senior designations
  • firms’ marketing and communications to senior investors
  • types of customer account information required to open accounts for senior investors
  • disclosures provided to senior investors
  • complaints filed by senior investors and the ways firms track those complaints
  • supervision of registered representatives as they interact with senior investors

Securities Helpline for Seniors

In 2015, FINRA launched the toll-free FINRA Securities Helpline for Seniors® to provide older investors with a supportive place to get assistance from knowledgeable FINRA staff related to concerns they have with their brokerage accounts and investments.

Senior investors can call FINRA's toll-free FINRA Securities Helpline for Seniors (844-57-HELPS or 844-574-3577) from 9:00 a.m. – 5:00 p.m. ET, Monday through Friday, and get neutral, knowledgeable assistance with:

  • understanding how to review investment portfolios or account statements;
  • concerns about the handling of a brokerage account; and
  • investor tools and resources from FINRA, including BrokerCheck®.

The Report on the FINRA Securities Helpline for Seniors highlights the contributions of the Helpline over the last five years and lays out effective practices for firms’ senior investor protection programs.

National Senior Investor Initiative

In 2013, FINRA and the SEC initiated an assessment of firms' policies and practices regarding their senior investor clients. This on-going effort focuses on suitability, disclosures, misrepresentation, advertising, pricing, compensation and supervision relating to recommended products and services.

The assessment also reviews firm’s written supervisory procedures to determine whether firms have placed adequate controls to identify potential financial abuse of senior investors or individuals with diminished mental capacity. We have found, among other things, that age plays a role in many firms' supervisory processes.

Download:

Senior Designations

In November 2011, FINRA issued Regulatory Notice 11-52 addressing the use of certifications and designations that imply expertise or specialty in advising senior investors (senior designations). The notice outlines findings from a survey of firms which focused on the prevalence of senior designation usage, the extent to which particular senior designations were used or prohibited, and the supervisory systems in place regarding senior designations. It also highlights practices used by firms regarding the use of senior designations. FINRA encourages firms to consider strengthening their supervisory procedures by implementing, as appropriate to their business, the sound practices outlined in this notice.

Use FINRA's Professional Designations tool to look up requirements to earn and maintain designations, including senior designations.

Related: Regulatory Notice 07-43 (FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers)

FINRA Investor Education Foundation

Since its establishment in 2003, the FINRA Investor Education Foundation has played a central role in FINRA's senior investor education and outreach efforts. The FINRA Foundation employs national, state and grassroots partnerships to develop and distribute fraud prevention resources, conduct outreach, and train consumers, law enforcement professionals and victim advocates.

Since 2008, the FINRA Foundation has:

  • touched hundreds of thousands of consumers with essential fraud prevention messages,
  • trained more than 20,000 professionals (including law enforcement officers, social workers and victim advocates) from thousands of different agencies,
  • developed and nationally distributed two public television documentaries, and
  • equipped thousands more stakeholders to fight fraud in communities nationwide.

Moreover, the FINRA Foundation continues to engage in research to understand fraud prevalence, the mechanics and impact of investment fraud, if and why older consumers are more heavily victimized, and behavioral and neurological risk factors.

Learn More about the FINRA Foundation Investor Protection Campaign

Contact OGC

FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see Interpreting the Rules for more information.

OGC staff contacts:
Jim Wrona and Alicia Goldin
FINRA, OGC
1700 K Street, NW
Washington, DC 20006
(202) 728-8000
 

  • Regulatory Notice 22-31
    FINRA Shares Practices for Obtaining Customers’ Trusted Contacts
    12/15/2022
  • Regulatory Notice 22-05
    FINRA Adopts Amendments to FINRA Rule 2165
    02/15/2022
  • Regulatory Notice 20-38
    FINRA Adopts Rule to Limit a Registered Person From Being Named a Customer’s Beneficiary or Holding a Position of Trust for or on Behalf of a Customer
    10/29/2020
  • Regulatory Notice 20-34
    Proposed Amendments to FINRA Rule 2165 and Retrospective Rule Review Report
    10/05/2020
  • Regulatory Notice 19-27
    FINRA Requests Comment on Rules and Issues Relating to Senior Investors
    08/09/2019
  • Regulatory Notice 17-11
    SEC Approves Rules Relating to Financial Exploitation of Seniors
    03/30/2017
  • Regulatory Notice 16-12
    FINRA Provides Guidance on Firm Responsibilities for Sales of Pension Income Stream Products
    04/18/2016
  • Regulatory Notice 11-52
    FINRA Reminds Firms of Their Obligations Regarding the Supervision of Registered Persons Using Senior Designations
    11/11/2011
  • Regulatory Notice 09-42
    FINRA Reminds Firms of Their Obligations With Variable Life Settlement Activities
    07/30/2009
  • Regulatory Notice 07-43
    FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers
    09/10/2007
  • Guidance
    Threat Intelligence Product: Protecting Vulnerable Adult and Senior Investors
    FINRA’s Financial Intelligence Unit (FIU) and Vulnerable Adults and Seniors Team (VAST) are issuing this Threat Intelligence Product (TIP), which provides an overview of FINRA’s observations regarding the vulnerability of senior investors to investment scams, the devastating consequences for the victims and the importance of education about financial scams to prevent initial victimization and re-victimization.
    May 10, 2024
  • Media Center
    Fighting Financial Exploitation: FINRA’s Vulnerable Adults and Seniors Team
    On this episode, we hear from members of both the Vulnerable Adults and Seniors (VAST) Intake and Investigations teams to hear how the groups work with individual investors, firms, states and other regulators to prevent and detect financial exploitation of senior and other vulnerable investors.
    April 30, 2024
  • Guidance
    Trusted Contact Persons
    The Trusted Contact Persons topic of the 2024 FINRA Annual Regulatory Oversight Report (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
    January 09, 2024
  • Media Center
    The Essential Senior Investor Protection Tools: FINRA Rules 2165 and 4512
    Every year, millions of seniors become victims of financial exploitation, resulting in billions of dollars in losses. That’s why FINRA worked to update Rule 4512 and implement Rule 2165 to help broker-dealer firms and their representatives protect their senior and other vulnerable adult customers. On this episode, we learn more.
    May 03, 2022
  • FAQ
    Frequently Asked Questions Regarding FINRA Rules Relating to Financial Exploitation of Senior Investors
    FINRA Rule 2165 (Financial Exploitation of Specified Adults) is the first uniform national standard for placing temporary holds to address suspected financial exploitation. Rule 2165 permits a member to place a temporary hold on a securities transaction or disbursement of funds or securities from the account of a Specified Adult customer when the firm reasonably believes that financial exploitation of that adult has occurred, is occurring, has been attempted or will be attempted. 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 for a customer’s account.
    March 01, 2022
  • Training
    Addressing and Reporting Financial Exploitation of Senior and Vulnerable Adult Investors

    Training for the Securities Industry

    NASAA, the SEC, and FINRA have provided this training presentation as a resource for the securities industry. Firms can use this presentation to train associated persons about how to detect, prevent, and report financial exploitation of senior and vulnerable adult investors.

    June 15, 2021
  • Podcast
    Overlapping Risks, Part 2: Anti-Money Laundering and Elder Exploitation
    A broker-deal firm’s anti-money laundering efforts may overlap with any number of other regulatory concerns. On this episode, the second in a two-part series, we’re looking at how AML may overlap with a firm’s efforts to protect senior investors from exploitation and fraud.
    November 10, 2020
  • Virtual Conference Panel
    Social Distancing and the Impact on Older Investors
    Today, social distancing is an important component of public health. However the isolation that results has important implications for financial decision making, fraud vulnerability, and cognition among older investors. Join this panel for a discussion of emerging research on these topics and steps you can take to further protect your clients.
    June 15, 2020
  • Protecting Senior Investors 2015-2020
    Appendix – Senior Investor Protection Resources

    FINRA Resources

    April 30, 2020
  • Protecting Senior Investors 2015-2020
    FINRA Senior Exploitation Rules

    Overview of FINRA Senior Exploitation Rules

    The FINRA Senior Exploitation Rules provide firms with the tools to protect senior investors and help firms address risks relating to possible financial exploitation. FINRA Rule 4512 (Customer Account Information) requires firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of a non-institutional customer’s account or when updating account information for an existing non-institutional customer account.

    April 30, 2020
  • Report / Study
    Protecting Senior Investors 2015-2020
    Seniors make up an increasingly large share of the American population1 and hold higher levels of wealth than other generations. These factors, among others, make seniors an attractive target for financial exploitation, with evidence suggesting that such exploitation has been increasing in terms of both scope and magnitude.
    April 30, 2020
  • Protecting Senior Investors 2015-2020
    The Helpline in Action

    Overview

    FINRA launched the Helpline on April 20, 2015 to provide investors with access to specially trained FINRA staff who can assist senior and vulnerable adult investors with questions or concerns about their brokerage accounts and investments. As of December 31, 2019,5 the Helpline has received over 18,000 calls from all 50 states and several countries. Helpline callers range in age from 17 to 102, with the majority of calls coming directly from seniors (with an average age of 70).

    April 30, 2020
  • Protecting Senior Investors 2015-2020
    Effective Practices from Firms' Senior Investor Protection Programs

    In 2019, FINRA assessed firms’ senior investor protection programs, including their implementation of the FINRA Senior Exploitation Rules. In particular, FINRA evaluated how firms addressed risks relating to senior investors in their policies and procedures; gathered trusted contact person information; developed training relating to senior investors; implemented systems to escalate financial exploitation concerns; placed holds on disbursements in customer accounts; conducted senior investor exploitation investigations; and reported instances of financial exploitation.

    April 22, 2020
  • Guidance
    Senior Safe Act Fact Sheet

    Please download the Senior Safe Act Fact Sheet

    May 19, 2019
  • Report / Study
    National Senior Investor Initiative Report

    One of the primary missions of the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) is the protection of investors, of which senior investors are an important and growing subset. As part of a collaborative effort, staff of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”)1  and FINRA (collectively, the “staff”) conducted 44 examinations of broker-dealers in 2013 that focused on how firms conduct business with senior investors as they prepare for and enter into retirement.

    March 15, 2015
  • Report / Study
    2011 Senior Designation Survey Results
    Today in the United States, nearly 40 million people are age 65 and older. This number is expected to more than double to 89 million by 2050.
    November 12, 2011
  • Interpretive Letter
    Interpretive Letter to Dan Danborn, Society of Certified Senior Advisors
    NASD Rule 2210 - Communications with the Public
    September 28, 2007
  • Report / Study
    Protecting Senior Investors: Report of Examination of Securities Firms Providing "Free Lunch" Sales Seminars

    With the aging of the baby boom generation, a growing number of our nation’s investors are at or near retirement age. Indeed, data presented at the first “Seniors Summit” held by the Securities and Exchange Commission (SEC) in July 2006 indicated that 75% of the nation’s consumer financial assets, valued at $16 trillion, are held by households headed by someone who is 50 or older. Within the next 20 years, 75 million people will have celebrated their 60th birthday.

    September 10, 2007
  • Investor Insights
    Social Isolation and the Risk of Investment Fraud
    Social isolation, whether voluntary or involuntary, has long been a leading factor contributing to the financial exploitation of older investors. FINRA, NASAA, the SEC's Office of Investor Education and Advocacy, NFA and the CFTC’s Office of Customer Education and Outreach are continuing to raise awareness of the devastating impact social isolation can have on senior investors and offer tips that can help.
  • Investor Insights
    Three Resources for Senior Investors
    Older Americans are frequently targeted by financial exploitation efforts, making investor protection and education of particular importance to this population. FINRA offers several services, including a dedicated helpline, that can help senior investors with their concerns.
  • Investor Education
    ‘Pig Butchering' Scams: What They Are and How to Avoid Them
    Don’t trust that unexpected text or direct message from a stranger—it might be the first step in a “pig butchering” scam. These scams often involve fraudsters contacting targets seemingly at random, then gaining trust before ultimately manipulating their targets into phony investments and disappearing with the funds.
  • Investor Education
    Don’t Fall for 'Regulator' Imposter Ploys
    While FINRA will never ask you for money, there are scammers who might try to convince you otherwise. These financial fraudsters are posing as regulators, requesting fees to transfer funds or offering bogus investment “guarantees” that will serve only to separate you from your savings.
  • Investor Education
    Boiler Rooms—An Old Stock Scam Gets a Technology Makeover
    The ways in which people communicate have changed with advancements in technology, and so have the tactics of “cold calling” boiler rooms. Today’s boiler rooms go beyond the telephone to contact potential investors, including pitching through messaging apps and social media. Regardless of the method of contact, the scammer’s goal and many of the red flags are the same.
  • Investor Insights
    Protecting Seniors From Financial Exploitation
    Every year, millions of seniors become victims of financial exploitation, resulting in billions of dollars in personal losses. Protection of senior investors is a top priority for the Financial Industry Regulatory Authority (FINRA) and is the focus of several rules intended to thwart financial exploitation.
  • Investor Insights
    Emotions Increase Susceptibility to Fraud in Older Adults
    New research suggests that seniors may be particularly vulnerable to the effects of heightened emotions on decision making. Researchers at the Stanford Center on Longevity, FINRA Foundation and AARP found that inducing emotions, such as excitement and anger, in older adults increased their intention to buy falsely advertised items.
  • Investor Education
    FINRA Securities Helpline for Seniors
    The FINRA Securities Helpline for Seniors is a toll-free number that senior investors can call to get assistance from FINRA or raise concerns about issues with brokerage accounts and investments.
  • Investor Education
    No Caiga en los Ardides de 'Reguladores' Impostores

    Si bien FINRA nunca le pedirá dinero, existen estafadores que podrían intentar convencerle de lo contrario. Estos estafadores financieros se hacen pasar por reguladores, solicitando cuotas para transferir fondos u ofreciendo falsas "garantías" de inversión que solo servirán para separarle de sus ahorros.