The SEC and FINRA have made it very clear that they are focused on senior customers and elder abuse. Granted, firms must be focused on the elder customers, but, at the same time, must also focus on the fact that many advisors are included in the graying generation.
What are firms to do about that? Before you do anything definitive, you should vet your ideas with an employment consultant or lawyer to make sure that any plan does not run afoul of labor and employment laws because older advisors may be within a protected class.
Separate and apart from any legal analysis, you should consider doing certain things to make sure your advisors are acting properly and clients are being protected. Here are some suggestions that, in reality, apply across all age groups; these areas of inquiry could include:
- Having a supervisor meet with the advisor on a more regular basis just to see how they are doing; i.e., are they acting properly in the office or are they even in the office.
- Monitor trading activity; has it changed radically over a short period of time.
- Analyze the outflows of cash from customer accounts.
- Analyze the loss of customers over time (i.e., has the advisor lost a number of clients in short order).
- Randomly contact customers to vet their recent experiences with their advisor.
These oversight tools may help you uncover an elder advisor who is suffering from dementia, or, quite possibly, uncover a young advisor who is defrauding customers. Either way, the key is simple, properly monitor your advisors’ activity and protect your clients in the process.
* photo from freedigitalphotos.net