The Nova Scotia Securities Commission is echoing a warning from Canada’s securities regulators of increasing instances of financial elder abuse as the baby boom generation ages.
The latest census from Statistics Canada showed the number of Canadians aged 55 to 64 has surpassed Canadians aged 15 to 24 for the first time ever, and the number of people over 85 is expected to triple over the next 25 years.
The problem of financial elder abuse is expected to have more of an impact in Nova Scotia and other maritime provinces because their populations are proportionally older than the national average.
The Canadian Securities Administrators (CSA), an umbrella organization of provincial and territorial securities regulators, has already taken measures to help increase safeguards against the issue.
Starting this year, it’s being recommended that financial advisors request clients provide a Trusted Contact Person (TCP) to alert if the advisor has concerns about a client’s ability to make financial decisions, or if advisors suspect a client is being exploited.
The CSA has also given advisors the power to place temporary holds on transactions if they suspect a client is suffering from dementia.
As a collection of provincial and territorial regulators, however, the CSA does not have the authority to require advisors to obtain a TCP, or require clients to provide one. Rules surrounding clients showing signs of mental illness vary from jurisdiction to jurisdiction.
The 13,000 member association of Canadian financial advisors, Advocis, has asked regulators to provide more clarity, more teeth, and legal protection for advisors through a “safe-harbour” provision which would protect the advisor from potential liability if they decide to put a hold on a transaction.
For now, Advocis is urging members to follow CSAs directive to request TCPs from clients and document that the request was made. It suggests advisors attempt to do it when they do their mandatory know-your-client reviews every two years.
Older Canadians can also designate a power of attorney (POA), which is a legal document that gives one or more people the authority to manage a person’s money and property if a doctor determines that person is unable for mental or physical reasons.
However, many older Canadians don’t have a power of attorney or even a financial advisor, and that puts the onus on them to take measures on their own.
Here are some suggestions from the Nova Scotia Securities Commission:
Ensure your financial and legal affairs are up to date
Check all accounts regularly to make sure they are not being accessed without your knowledge, and legal affairs such as power of attorney are up to date.
Keep extra copies of paperwork
Be sure you understand any financial documents you are signing and keep copies in your personal files. It helps to include the signature of a witness.
Review all statements
Don’t leave vital financial information for someone else to deal with. If you have questions or don’t understand something ask your advisor, bank or lawyer to explain.
Don’t cave to pressure about financial decisions
In some cases, the elder abuse is being committed by family members or friends. You have the final say in matters that impact you. Consider obtaining independent legal advice when lending money, transferring ownership of property, reviewing your will and dealing with matters relating to caregiver arrangements.
Fully understand power of attorney agreements before signing
Make sure you know what power you are giving and who you are giving it to. Know the process and procedures for rescinding the agreement.