FINRA is stepping up its long-standing efforts to safeguard senior investors, spotlighting the issue in a recent Investor page feature and reiterating expectations for firms. This renewed emphasis comes as older Americans represent both one of the fastest-growing investor demographics and a primary target for financial fraud.

While the article was aimed at the public, it sends a clear message to firms: protecting older investors is not just encouraged—it’s expected. The publication consolidates existing rules, highlights tools like Trusted Contact Persons (TCPs) and temporary holds, and reinforces that firms should be proactive in preventing exploitation—not just reacting after harm occurs.

FINRA’s focus aligns with broader industry trends, where regulators are increasing scrutiny on suitability, conflicts of interest, and the adequacy of internal escalation procedures. It also reflects lessons learned from recent enforcement actions and hotline reports, where gaps in supervision left vulnerable clients exposed.

Key Areas of Focus

  • Trusted Contact Person (TCP): Firms must make a reasonable effort to obtain TCP details for every non-institutional account (FINRA Rule 4512) and understand permissible disclosure scenarios.
  • Temporary Holds: Under FINRA Rule 2165, firms may place holds on disbursements or securities transactions when exploitation is suspected, with proper documentation and escalation.
  • Conflicts of Interest: FINRA Rule 3241 restricts registered persons from holding roles like beneficiary or trustee without firm approval, mitigating undue influence risks.
  • Helpline for Seniors: Since 2015, the FINRA Securities Helpline for Seniors has generated investigations and uncovered misconduct.
  • Exam Priorities: Senior-related topics remain a staple of FINRA exams, including suitability, rep training, and use of senior designations.

At the 2024 FINRA Annual Conference, regulators reinforced the importance of representative training, timely escalation, and strategic partnerships with Adult Protective Services (APS). They cautioned that APS’s scope is limited, making direct firm action critical. FINRA also promoted the use of behavioral nudges, like mandatory TCP selection prompts, to improve investor safeguards.

Compliance Takeaway: Strengthening Senior Investor Protections
Firms should use this renewed emphasis as an opportunity to:

  • Integrate behavioral nudges to encourage TCP designation during onboarding and annual reviews.
  • Enhance representative training on red flags, reporting procedures, and documentation standards.
  • Formalize escalation protocols for suspected exploitation, including alternatives when APS is not the appropriate channel.
  • Review suitability and marketing practices, particularly around senior designations.

As regulatory attention intensifies, proactive measures can protect vulnerable clients, strengthen trust, and reduce the risk of supervisory findings.