Helping clients protect their financial resources
Wells Fargo Advisors team members work to help seniors by managing risk and putting safeguards in place.
The financial advisor was suspicious: Why was an 80-year-old client taking so much out of the account she relied on for retirement, and so often?
The Elder Client Initiatives team of Wells Fargo Advisors investigated, and it soon had the answer: One of her own sons was taking the money for himself. The team moved quickly. Adding his brother as a trusted contact on her account stopped the withdrawals.
It’s one of many successes the team has logged since it was created in 2014 — among the first of its kind in the brokerage industry — as it seeks to protect older Americans from fraud and financial abuse. The crime is estimated to cost older Americans about $37 billion annually and affect nearly one in five seniors.
“Everything we do is designed to help clients manage risk and avoid financial harm,” said Ron Long, head of Elder Client Initiatives at Wells Fargo Advisors. “Our efforts will have been successful if they saved the wealth of just one client.”
As the leader of Elder Client Initiatives, Long works with lawmakers, protective services, and other senior advocacy groups across the country to help pass legislation that better protects seniors from financial crimes.
“With 10,000 people reaching 65 every day, the senior issue has been something on our securities regulatory radar screen for quite a while.” — Joe Borg
In Alabama, he worked with Joe Borg, director of the Alabama Securities Commission, to come up with proposed provisions, such as requiring the reporting of certain transactions and authorizing financial advisors to speak with the clients’ trusted contacts about suspected problems.
Long said Wells Fargo Advisors realized it needed a dedicated team when it began tracking suspected fraud cases in August 2010, and identified about 30 a month. By 2014, when Wells Fargo Advisors created Elder Client Initiatives, that number had grown to 100 a month.
Today, the team investigates more than 200 cases a month, typically referred by financial advisors who spot red flags that indicate their customers may be at risk of abuse. It also conducts research on related issues and works with protective services and senior advocacy groups across the U.S.
Long, whose team commissioned a study on elder financial abuse, suspects the growing phenomenon of such cases is fueled by the aging of the baby-boom generation, the generation’s wealth, the advancement of technology, and the increased sophistication of scammers and scams.
“From our study, we know that families are not always having the conversations they should be having about protecting savings and investments and other assets before parents become incapacitated or have trouble making those decisions themselves,” Long said, referring to the 2018 Wells Fargo Elder Needs survey.
“That allows scammers to come onto the scene and take advantage.”
Wells Fargo & Company’s leadership in the fight against elder financial abuse has prompted leaders throughout the country to help them protect senior citizens in their own states.
“Looking at a case on my desk right now — a romance scam — we were able to get a pastor’s help as a trusted contact to convince someone they had been taken,” Borg said. “But the man had already sent about $80,000 overseas before we were able to get it stopped. The earlier we can intervene, the better.”
Seniors in Alabama have been a popular target for scammers, Borg said. The state’s Robert Trent Jones Golf Trail, Gulf Coast beaches, low taxes, and other features have drawn both retirees — and fraudsters.
“With 10,000 people reaching 65 every day, the senior issue has been something on our securities regulatory radar screen for quite a while,” Borg said. The issue prompted the North American Securities Administrators Association, or NASAA, the oldest international organization devoted to investor protection, to begin drafting a set of standards for tougher elder financial abuse protection in 2014.
After learning about Long and the Elder Client Initiative team’s efforts to help protect its elderly customers, the NASAA asked Long to serve on a national advisory council recommending standards for its “Model Rule” which could be adopted by the securities industry, Alabama, and other states working to better protect seniors.
At Long’s urging, the Alabama law features the ability to contact a responsible person even when the older client does not list a trusted contact. Though a departure from the Model Rule, Borg said this feature gives tremendous flexibility to financial advisors and Alabama residents, as many advisors know a person who could be helpful even if they are not an official “trusted contact.”
“If a hospital has to report when someone falls out of bed, why shouldn’t we as an industry have to report attempts to wipe out someone’s bank or retirement account?” said Borg, a member of the NASAA board and serving on the NASAA Committee on Senior Issues and Diminished Capacity.
Long, who also serves as a member of the NASAA Advisory Committee, and others, were first to craft the new standards.
“The Alabama legislature shared our concerns, and the state law drafted by the Alabama Securities Commission based on the Model Act of the NASAA working group had about 90 percent of what we recommended in the rule,” Long said. “It passed the House and Senate by overwhelming margins.”
Wells Fargo Advisors has worked to strengthen protections for elderly customers in 21 states: Alabama, Alaska, Arkansas, Colorado, Delaware, Indiana, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Tennessee, Texas, Utah, Vermont, and Washington.
Every year, Wells Fargo trains all its team members who interact with customers — including bankers — on how to prevent, identify, and report suspected elder financial abuse.
Wells Fargo launched a national awareness campaign in May 2018 around a survey Wells Fargo Advisors commissioned by Versta Research to help identify ways to help prevent elder financial abuse. The research found that while nearly everyone — 98 percent — agrees that older people are more susceptible to financial scams, only 10 percent of older Americans themselves believe they’re at risk.
The survey also found that most older Americans aren’t taking precautions to help protect themselves — such as using automatic bill pay, having large transaction alerts sent to others, and locking checks or credit cards away. And only one-third have talked to their children about their wishes if they become unable to manage their money.
“Putting safeguards in place and engaging in a transparent, open dialogue are critical in if we want to protect the dollars older Americans have worked so hard to accumulate,” Long said. “We are proud to be part of that.”
Since Alabama enacted the Protection of Vulnerable Adults from Financial Exploitation Act in 2016, the results have been positive, Borg said.
“The law has worked well, and together with industry allies like Wells Fargo Advisors, we’re making it harder for people to be victimized by scams and easier for us and the securities industry to follow up when we need to,” he said.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. CAR-1118-03502