If you are not prepared to decide on a Power of Attorney for your investments, assigning a trusted contact for your investments may be a good option.
This month Marci Perreault, Certified Financial Planner, gives some context as to why this may make sense.
As always, Marci is available for consultation.
Enjoy your summer days!
Have you named a trusted contact person?
The Canadian Securities Administrators, an umbrella organization of provincial and territorial securities regulators, introduced a measure two years ago to help protect investors’ financial interests. Investors could give their advisor the name of a “trusted contact person.”
Meeting a need
An advisor can contact this individual if the advisor believes the investor may be losing their ability to make sound financial decisions or could be vulnerable to financial exploitation or fraud.
Much of the need for a trusted contact person is to protect investors at older ages when they may develop dementia or another cognitive impairment, but investors may also benefit from this help at a younger age. For example, someone who suffers a serious illness could be taken advantage of by a caregiver.
An advisor’s unique position
A wealth advisor may notice changes in an investor’s behaviour or signs of exploitation that could jeopardize their assets. Perhaps an investor is becoming confused about financial concepts they had understood before, or they’ve been making large, unexplained withdrawals.
An advisor could reach out to the trusted contact person to discuss their concerns. The contact person might offer helpful information to the advisor, have a discussion with the investor or take other steps to address the situation.
If you haven’t yet named a trusted contact person, consider naming a family member or close friend. Keep in mind, the Canadian Securities Administrators recommends that you choose a different person than your power of attorney or mandate representative, to provide an additional level of security.