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Announcing our new Southwestern Ohio Division!

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Our Commitment to Protecting Vulnerable Investors

Photo of author, John Binz, JD.
John Binz, JD
Financial Strategist

Con artists have been trying to take advantage of people since the dawn of time and have always targeted the most vulnerable members of society. Now more than ever, financial advisors need to identify those individuals at risk and take steps to prevent their exploitation.

While it is a bit of a moving target trying to define a vulnerable investor, most state statutes focus on any adult who has a physical or mental impairment that substantially limits major life activities and any person over 60 years of age. According to the U.S. Census Bureau, “In 2015, among the 7.3 billion people estimated worldwide, 617.1 million (9 percent) were aged 65 and older. By 2030, the older population will be about 1 billion (12 percent of the projected total world population).”1

This makes 65 and older the fastest growing segment of the population, and both state regulators and the U.S. Securities Exchange Commission (SEC) are rightly focusing on what advisory firms are doing to protect their clients. This brings up the question, “What is McKinley Carter doing to protect its vulnerable clients?”

As you know, we take great pride in our efforts to protect the assets and identity of our clients, and we have developed a comprehensive, three-pronged approach to identifying and protecting vulnerable and elder investors. By leveraging robust training, the expertise of our professional partners, and innovative technology, we stand ready to combat financial exploitation if or when it occurs.

Training

Proper training and education is the first line of defense against financial exploitation of our clients. Identifying the signs of elder abuse and potential exploitation can be difficult. Accordingly, we have multiple trainings throughout the year to keep the topic fresh on everyone’s mind and share the most updated research. We leverage the expertise of our own advisors to host training sessions and bring in specialists to teach us about the intricacies of financial exploitation and keep us up to date on new regulations.

We then take education one step further by sharing important information directly with the families and friends of our clients. As we build multi-generational relationships with our clients, we use resources like Associate Financial Strategist Chelsea Clegg, CFP®'s excellent article “Recognizing the Signs of Elder Abuse” as a tool for clients and their family members to educate themselves and stay alert. This empowers family members to work with us in the fight against exploitation.

Professional Partnerships

Along with our internal efforts, we partner with industry experts to help keep our clients safe. Charles McGortey, senior compliance consultant of Hardin Compliance Consulting, sums up this relationship perfectly saying, “Hardin Compliance Consulting is proud that we can assist McKinley Carter in the battle to counter senior investor and vulnerable adult financial exploitation. By crafting policies and procedures, delivering education, and providing support when issues arise, we join McKinley Carter in the fight to protect their vulnerable clients.”

We first leverage Hardin’s expertise by partnering to create sound policies and procedures. They stay up to date on all federal and state regulations, and they make sure our policies are crafted to go above and beyond those requirements. They hold trainings to ensure that every member of the McKinley Carter team is informed and empowered to integrate those policies into their work every day. Finally, Hardin stands ready to partner with us if any issue should arise. They make sure we have a team of experts that can be called into action at a moment’s notice.

Innovative Technology

While the growing use of technology can certainly be used to take advantage of vulnerable individuals, we also believe it is one of our strongest assets in the fight against exploitation. One of the most difficult aspects of elder abuse and financial exploitation is that it does not always happen at once. In some cases, the would-be exploiter will take years to build a relationship with his victim.

This is where McKinley Carter leverages its technology tools to help protect our clients. By creating a system that keeps a record of any suspicious activity (financial or otherwise), advisors can easily look back over the entire history of client relationship to determine if any signs of abuse are developing. Advances in technology have also allowed us to easily create a system that notifies advisors if their client has been identified as vulnerable, and each advisor can quickly inform all relevant parties if a suspicious incident has occurred. By simplifying the process and leveraging the systems we use every day, we can protect our clients and identify potential issues before they happen.

Financial exploitation is something we hope to never encounter. By educating our team and our clients, partnering with experts, and leveraging technology, we make every effort to protect our clients and keep them investing in a good life.


1https://www.census.gov/content/dam/Census/library/publications/2018/acs/ACS-38.pdf

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