• Client focus, i.e. retirement income, or bequests to dependants
and others, e.g. charitable causes;
• Liquidity needs for additional expense requirements, e.g.
health care services or assisted living;
• Dependent children or grandchildren; and
• Life expectancy.
The need to rely on investment income can result in a client feeling
pressured to assume greater risks in the hopes of generating higher
investment income. In assessing whether an investment is suitable
for a senior client or vulnerable client, Representatives should
ensure the client’s risk tolerance is reasonable and the client has the
ability to meet financial commitments.
Many senior clients will increasingly defer to investment professionals as they age and rely on Representatives for investment
advice. However, there are many seniors who rely more on family
members than professionals. Where a senior client or other
vulnerable clients provides a Representative with inconsistent
investment objectives, the Representative must identify the
inconsistencies to the client. The Representative must assist the
client in deciding which of the objectives takes priority and the risks
associated with placing greater emphasis on achieving one or more
of the stated objectives over others. This is particularly relevant
with the potentially conflicting objectives of capital preservation,
income generation, and capital growth.
In dealing with senior clients or other vulnerable clients, Representatives must provide clear, concise information about the investments products being offered. Where possible Representatives
should provide senior clients with detailed information in writing
and in plain language (i.e. avoiding technical jargon) to support
discussions. In some cases, Representatives may want to have a
caregiver or trusted relative participate in meetings with the client
to ensure there is no misunderstanding regarding the product or the
information being provided.
Representatives should increase the frequency of their contact with
clients as they age. In addition to ensuring KYC information is
current, the Firm needs to be informed about changes in clients’
employment status, health and personal circumstances. Representatives must encourage clients to keep them informed of changes
in their KYC information and in particular, when the client retires.
Maintaining detailed notes and documentation becomes particularly important if the client begins to have difficulties with memory.
Representatives should send follow-up correspondence to clients
after meetings or discussions to prevent any misunderstandings.
When writing to senior clients, Representatives should use a larger
font and plain language formatting for easier reading.
Representatives should strongly encourage senior clients and other
vulnerable clients to provide the Firm with an alternate contact,
such as a trusted family member. The Firm will obtain instructions
from the client relating the matters can be discussed with the
alternate contact and if duplicate copies of client statements or other
correspondence should be provided to the alternate contact. If the
client has a power of attorney registered firm will confirm that the
power of attorney remains valid when KYC information is updated.
Representatives dealing with senior clients and other vulnerable
clients should be aware of signs indicating diminished mental
capacity. A client with diminished mental capacity will have a
reduced ability to make an informed investment decisions. If a
Representative is concerned that a client may have diminished
capacity the matter should be referred to the CCO and UDP. The
reasons for the concern must be documented.
Senior clients and other vulnerable clients often rely on others for
investment advice or ask others to make investment decisions on
their behalf. Unfortunately, this has the potential to leave these
clients vulnerable to financial exploitation. Specifically, a person
exploits a position of influence or trust over an elderly person or
otherwise vulnerable person to gain access to that person’s assets,
funds or property. Examples of signs which may indicate that a
client may be subject to elder abuse or financial exploitation
• The client gives a power of attorney to someone who appears
to be inappropriate;
• Indications that the client does not have control over or access
to their own money;
• The client’s mailing address has been changed to an unfamiliar
and unexplained address;
• The Representative is unable or not allowed to speak directly
with the client;
• The client appears to be suddenly isolated from friends and
• There is a sudden, unexplained or unusual change in the client’s
• There are unexplained disbursements made in a client’s account
that are outside of the norm;
• The sudden appearance of a new individual involved in the
client’s financial affairs.
If a Representative is concerned that a client may the subject of
elder abuse or financial exploitation the matter should be referred
to the CCO and UDP. Again the reasons for the concern must be
documented. The Firm should discuss the matter with the client’s
alternate contact or the person who has power of attorney (provided
the concerns are not related to any of these persons). Situations
could arise where the firm should contact law enforcement or
government protective service organizations. Representatives
should not proceed with any transaction or investment under
consideration until the issue is appropriately resolved.
President, North Star Compliance &