Over the past several years, our society has begun to recognize a scourge growing amongst us: the financial abuse and exploitation of seniors and vulnerable adults.
Sadly, the number of victims is likely to grow simply because there will be exponentially more seniors living in the U.S. LIMRA Secure Retirement Institute estimates that there are over 50 million Americans aged 65 and older today, with 11,000 more joining the ranks each day.
Recently there has been significant legislative and regulatory efforts to help protect seniors and vulnerable adults. Over the past two years, several states have adopted, either wholly or in part, the North American Securities Administrators Association Model Act. Last week, FINRA’s Rule 2165 went into effect and both the U.S. House and Senate have proposed legislation designed to protect seniors from financial exploitation.
Each measure empowers financial services professionals to report on potential financial exploitation and many encourage training to help professionals to recognize those most vulnerable to financial exploitation and identify suspicious activities, transactions and other red flags that may indicate potential financial abuse.
Having the right training can help mitigate the risk of your clients becoming victims of financial exploitation. Effective training must give advisors and other client-facing reps three pillars of knowledge:
An understanding about who are most vulnerable to financial exploitation and the common types and methods used by those seeking to defraud them.
An overview of the legislative and regulatory landscape, how the requirements differ by jurisdiction, and what they need to do to comply.
Knowledge about how to identify and report suspicious activity to protect their clients.
Recognizing the need for an industry-wide training program that complies with various new regulatory requirements and teaches professionals how they can prevent and report elder financial abuse, my organization, LIMRA, recently launched a new online training program, Recognizing Financial Exploitation (RFE).
As a trade association, we worked with stakeholders across the industry to develop RFE training that could educate and empower financial professionals to protect their senior clients and comply with evolving regulatory requirements. In addition, the program is uniquely designed to be customized to meet company-specific requirements.
What’s at stake? AARP estimates that one in 10 senior Americans are victims of financial exploitation, losing up to $3 billion annually. According to Institute research, seniors will control assets in excess of $11 trillion by 2022 — potentially emboldening criminals to target these vulnerable adults.
One might expect family members to protect these seniors, but the National Committee for the Prevention of Elder Abuse reports that 90% of the perpetrators are family members.
I believe this emerging crisis offers the insurance industry a unique opportunity to lead. For more than 250 years, our industry’s mission has been to protect American’s financial security and of course, protecting our seniors should be a priority for all of us. LIMRA’s training is designed to support our industry as it leads the efforts to detect and deter those who seek to defraud our seniors.
— Read House Passes Senior Safe Act on ThinkAdvisor.