Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

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James A. Sommerfield, Jr., CSCP
Senior Compliance Officer
Wintrust Wealth Management

As a teenager, I can remember overhearing my grandfather, who at that time was in his 70s, discussing personal finances with my father. Their conversations covered a range of topics, from the stock market, to his estate plan, to his health, medical care and beyond. I knew that my father was my grandfather’s executor and remember thinking, ‘I am glad dad is looking out for grandpa.’ Fast forward 30+ years and now I find myself having those same conversations with my father. While times may have changed, the conversations stay the same.

Over the last 30 years, America has seen a tremendous demographic shift; one that seems likely to continue well into the future. As many sociologists note, America is an aging population. According to the National Center on Elder Abuse (NCEA), “in the United States, the 2010 Census recorded the greatest number and proportion of people age 65 and older in history: 40.3 million, or 13% of the total population. In 2050, the population aged 65 and over is projected to be more than double, 83.7 million. In addition, the number of those aged 85 and over is projected to grow from 5.9 million in 2012 to 8.9 million in 2030 and to 18 million by 2050. Another demographic trend is older women outnumbering older men. In 2010 there were 89 men per 100 women among those aged 65 to 69 and 38 men per 100 women among those aged 90 and over.”

So what do these statistics mean? We are living longer, women in particular. As medical science advances, so too does life expectancy; however, as we age, we become more dependent on others, reliant on medical care and treatments for chronic conditions, susceptible to diseases like dementia and Alzheimer’s, and sadly vulnerable to elder abuse and financial exploitation. Fortunately, recent regulatory changes have been put into effect which are designed to protect senior investors.

In February 2018, the Financial Industry Regulatory Authority (FINRA) implemented rule changes that require member firms to make a reasonable effort to identify a trusted person for their clients. While this person would not necessarily have power of attorney or trading authority on the specified account, this person would be contacted if a financial advisor is concerned that a client is suffering from diminished mental capacity or elder abuse. The trusted contact can be anyone the client appoints; a family member, a friend, or a confidant. While the trusted contact is only part of FINRA’s rule changes aimed at protecting seniors, it is an important first step for firms in protecting customers from exploitation. It also grants clients the power to establish who has their best interests in mind, and who they can trust to look out for them. As you sit down this holiday season with family and friends, I encourage you to think about who is looking out for you, or others in your family.

Establishing a trusted contact, while not a substitute for the establishment of a power of attorney and proper estate planning, is a good first step and one that should not be overlooked. If you have not done so, ask your financial advisor about establishing a trusted contact for your accounts. For those who have already done so, I recommend you review your trusted contact no less than annually. For more information on FINRA’s senior protection rules visit to www.finra.org/investors.