After a Maryland financial advisor inherited $500,000 from an elderly client, lawmakers have asked the governing body of the securities industry, the Financial Industry Regulatory Authority (FINRA), to provide guidance over whether and how brokers can inherit wealth from customers, especially senior investors.
According to FINRA’s latest statistics, all arbitration proceedings take an average of 14.2 months to close. For cases decided by an arbitration panel, the average time is 16.5 months. For those decided “on papers” — claims with no hearings — the average is 6.5 months.
FINRA’s fine and demand for restitution, along with Lewis’ long prison sentence, sends a strong message that such failures by broker-dealers will not be tolerated. In today’s climate where protecting seniors has become paramount, we expect to see more and more of such regulatory actions.
Finance and securities industry regulators have mobilized their significant resources in an effort to protect American investors, especially retired and senior citizen investors.
In many cases, seniors don’t realize their investment portfolios no longer reflect the risk-tolerances and investment objectives they indicated in their broker-dealer account opening documents. On your account statements, your investor profile may not change. It may still be labeled “Conservative” or “Moderate-risk” while the actual investments or overall allocation of investments you hold are anything but conservative or moderate.