Calif. Weighs Mandatory Reporting of Suspected Elder Financial Abuse

Ignites (March 12, 2019) California last month took the first step toward imposing more stringent obligations on brokers and investment advisors with respect to reporting suspected cases of elder financial abuse.

Last month, Republican state senator John Moorlach introduced a bill that would make it mandatory for brokers and investment advisors to notify authorities if a client requests a “curious” transaction that could indicate financial exploitation by an outside party.  “Watching Alzheimer’s and dementia concerns growing in our state, providing safeguards to prevent financial abuse for those in the beginning stages of this difficult life journey is critical,” Moorlach wrote in a March 6 web post. In proposing the bill, Moorlach says he plans to “work with financial professionals who appreciate their fiduciary roles to protect their aging clientele.” As it stands, California law requires other financial institutions — primarily credit unions and banks — to flag any incidents of “suspected financial abuse of an elder or dependent adult,” noted Keith Bishop, a partner at California-based Allen Matkins, in a March 6 client alert.