How financial services firms can help employee caregivers

Financial services firms are in the business of caring for customers — resolving issues, addressing multiple needs and providing a high-touch experience. But some of that care and concern should be directed to our own employees, many of whom currently serve, or will serve in the future as the caregiver of a senior family member.

With more than 40 million caregivers across America, many employees in effect have a second job — a role that can take a physical, financial and mental toll.

Responsibilities can vary, but the average caregiver spends more than 10 hours per week offering support, doing such things as helping with grocery shopping, driving to appointments, and engaging with other service providers. Less than half of current caregivers receive any form of financial assistance for that support, yet the average caregiver spends more than $7,000 per year helping the elder in their care, according to the Safeguarding Our Seniors study from Allianz Life.

One key issue facing both seniors and their caregivers (and one very relevant to our industry), is elder financial abuse. Financial abuse can severely reduce a senior's hard-earned savings, but the damage doesn't stop there.

According to the Allianz study, nearly 90% of both active and potential caregivers said they experienced a financial impact when their elder was financially abused, with the average cost to those caregivers reaching a staggering $36,000.

In addition, those who are providing care for past victims of financial fraud are spending significantly more than those caring for elders with no history of financial abuse, which in turn negatively affects the caregivers' ability to save for their own needs.

Under the recently enacted Senior Safe Act, all financial services firms are required to provide training to employees to help them spot signs of elder financial exploitation, and firms are empowered to notify the proper agencies and local units of government if they believe a client may be the target of financial exploitation — without fear of negative repercussions. That is an important step forward, but in addition to watching out for their customers, financial services firms should also make protecting their employee caregivers from financial abuse a top priority.

Here are a few ways that financial services organizations can help employee caregivers:

• Educate employee caregivers on the red flags to help them spot potential financial abuse in their own families. While the signs may be different for financial professionals, family caregivers are likely to be much more in tune with their elder's finances and should be aware of any warning signs. This may include changes in financial activity such as inconsistent transactions, opening new debit or credit cards, adding new account holders or changing a power of attorney.

• Keep employees up to speed on trending methods of exploitation, including phishing and internet scams, phone calls from people pretending to be family members needing help, home repair fraud, messages from someone pretending to be from the IRS, and fake lottery and sweepstakes winnings. This training could be offered more often than the annual or biannual training that should already be in place to comply with the Senior Safe Act.

• Encourage employees to talk about the issue with the person they care for. Elder financial abuse can be a sensitive topic, but starting a dialogue and sharing examples of potential fraud are the first steps in raising awareness.

• Offer access to care management programs, which are often available through health insurance providers. These programs provide resources for caregivers, such as connecting them with relevant local agencies, and can help if someone suspects their family member is undergoing or being targeted for financial abuse.

Beyond elder financial abuse, firms should consider adding extra benefits and support programs for caregivers, such as paid caregiver leave or flexible work schedules to help accommodate their needs.

The financial services industry is already on the front lines of addressing elder financial abuse among customers, but the caregivers within our own walls may be facing these same challenges.

In our industry, best practices in protecting consumers should start at home. Financial services firms have an important opportunity to help their own employee caregivers protect and support the elder members of their families and in the process help reduce elder financial abuse among the growing population of older adults.

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How financial services firms can help employee caregivers

Senior Safe Act could help curb elder financial abuse

Tara A. LaClair is a Crowe & Dunlevy director and co-chair of the firm’s Securities Litigation, Enforcement & Compliance Practice Group.

Q: What is the Senior Safe Act, and who does it impact?

A: President Trump signed the Senior Safe Act (SSA) into law earlier this year as part of a larger bill pulling back several provisions of the Dodd Frank Act that often tied the hands of financial institutions in reporting suspected financial abuse. In doing so, the SSA provides older Americans with another defense against financial exploitation; something up to one in five fall victim to each year. The SSA, which had bipartisan support, encourages the reporting of suspected abuse by providing immunities to certain financial institutions that provide training to their employees on recognizing and dealing with financial abuse of seniors. The covered financial institutions include banks, savings and loans, investment advisers, insurance companies, broker-dealers and their employees. The SSA seems to recognize these financial professionals may be the first line of defense in spotting signs of elder financial abuse and offers protection from liability and violations of privacy in alerting authorities about potential fraud.

Q: What training is now required to protect the interests of senior investors?

A: The SSA adopts a motivational rather than mandatory approach. On its own, it neither mandates specific training nor requires reporting of financial abuse. Instead, it strongly encourages both by providing immunities contingent on training. To qualify for immunity, training must include “how to identify and report suspected exploitation of a citizen internally, and, as appropriate, to government officials or law enforcement authorities.” The training should also include how to recognize common signs of financial exploitation.  

Q: What steps should financial institutions take to receive the protections of the SSA?

A: Institutions relying on immunity under the SSA are required to keep training records and implement the programs “as soon as practicable.” For individuals who begin employment after the SSA's effective date, the training must be implemented no later than a year after the individual becomes employed. It is also important for institutions to ensure all steps have been documented. Institutions should also provide employees with both written guidance and training on detecting exploitation. The SSA also appears to contemplate a chain of command for reporting, which means institutions should develop a reporting structure if exploitation or abuse is suspected. They should also designate a person or department to respond to questions, provide resources and address reporting issues. Clients of covered financial institutions should expect the seeking of sufficient information to make appropriate risk-based assessments, including requests for a trusted contact person in the event concerns arise.

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Senior Safe Act could help curb elder financial abuse

How The Senior Safe Act Could Curb Elder Financial Abuse

Credit: Shutterstock

Elder financial abuse is scamming some 5 million older Americans a year, through cons like get-rich-schemes and fake fundraising campaigns. Trusted family members, friends, caregivers and financial advisers are often to blame, but unsolicited scams are also very common. With the problem escalating, lawmakers in Congress recently passed bipartisan legislation aimed at curbing it and protecting potential victims, known as the Senior Safe Act.

The motivation is two-fold: Lawmakers have a duty to protect their constituents, particularly the most vulnerable ones, and older people defrauded by these criminals often turn to Medicaid to cover medical costs, taxing an already broken system.

The Senior Safe Act and Elder Financial Abuse

In mid-March, as part of a bigger financial services overhaul package, the Senate passed the Senior Safe Act,  following a similar move by the House of Representatives. The bills must now be reconciled in order to get to President Donald Trump’s desk and become law.

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How The Senior Safe Act Could Curb Elder Financial Abuse

House approves legislation to help advisers combat senior exploitation

The Senior Safe Act provides liability protection for financial professionals who report cases of suspected elder abuse to regulators or other authorities

Legislation that would help financial advisers combat financial exploitation of senior citizens gained House approval Monday night in a bill that could provide a vehicle to get it through the Senate.

House lawmakers passed on voice vote a larger bill that contained the Senior Safe Act, a measure that provides liability protection for investment advisers, brokers and other financial professionals who report cases of suspected elder abuse to regulators or other authorities.

The Senior Safe Act was also included in a larger bill approved by the Senate Banking Committee in December that would reform parts of the Dodd-Frank financial law.

But the bill the House passed on Monday may provide the smoothest pathway to full Senate approval for the elder-abuse legislation because the Senate Banking bill could get hung up in the House.

"This [House bill] that it is attached to seems the least controversial piece of legislation that contains Senior Safe Act provisions," said Paul Richman, vice president of government affairs at the Insured Retirement Institute. "That's why we're hopeful that this House bill will be taken up expeditiously in the Senate."

The Senior Safe Act, written by Sens. Susan Collins, R-Me., and Claire McCaskill, D-Mo., was approved by the House in a previous Congress but failed to make it through the Senate when one senator placed a hold on the bill. It had to be reintroduced in the current congressional session.

Another obstacle facing the bill is a difficult Senate agenda that includes approving a budget and tackling immigration legislation.

"This is still high on their list in the Senate, but until other issues are resolved, it will be difficult to move it forward," Mr. Richman said.

If the bill is approved by Congress, it would bring a federal law into the senior financial exploitation area.

A Financial Industry Regulatory Authority Inc. regulation goes into effect on Feb. 5 that gives brokers safe harbor to report exploitation and allows them to place temporary holds on disbursements from accounts of elderly clients who may have been victimized by scams.

Also, a number of states have approved a North American Securities Administrators model rule that is similar to the Finra regulation but that mandates incident reporting.

The Senior Safe Act has wide support among financial industry trade associations and other organizations, including IRI, NASAA, the American Council of Life Insurers and the Investment Company Institute.

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House approves legislation to help advisers combat senior exploitation