Amy Lynch sees new elder protection rule putting firms in corner (IGNITES – Subscription Req’d)

Amy Lynch, Founder and President - FrontLine Compliance
Amy Lynch, Founder and President – FrontLine Compliance

A recent lawsuit challenging Fidelity’s reliance on FINRA’s new elder protection rule reveals the challenges posed to firms interpreting the application of the rule. FINRA Rule 2165, Financial Exploitation of Specified Adults, permits a firm that reasonably believes that financial exploitation has occurred, is occurring, has been attempted or will be attempted to place a temporary hold on the account of the affected customer. FrontLine Compliance President Amy Lynch explains that firms are challenged by the new rule without a clear definition of the term competence, and the rule’s assertion that it’s more of a facts and circumstances evaluation of the business relationship between the rep and the client. Ms. Lynch further states that firms updating policies and procedures to account for the new rule are requiring that a rep immediately involve their supervisor if he or she suspects a client is being coerced. See IGNITES (subscription required), Suit Over Frozen Fido Accounts Highlights Elder-Protection Challenges.