Policy-makers must do more to protect senior investors.
Canadians are used to comparing ourselves favourably against our neighbours to the south on issues such as health care, gun control and climate change. But one matter in which Canada is falling short of the U.S. is the protection of seniors. Canadian policy-makers should be looking to the U.S. for inspiration.
That Canada’s population is aging is no secret. And, inevitably, getting older is accompanied by some measure of cognitive decline. Of course, many older Canadians function just fine. But a growing group with diminishing cognitive skills, not to mention a lifetime of accumulated wealth, represents an ever more attractive target for fraudsters and opportunists.
The financial services sector is well positioned to help combat this problem, yet it’s hamstrung in a few significant ways. For one, there’s a certain amount of legal uncertainty if financial services firms and financial advisors wish to intervene in cases of suspected abuse. The risk of civil liability and the fear of violating privacy rights are deterrents to taking action to try to protect a client who may be exploited.
At the same time, where to turn for help often isn’t clear. Although certain cases may be suitable for police involvement, many are not. Securities regulators may be helpful in some instances; but, again, there are significant limits to their capabilities and resources. In Canada, there’s no clear equivalent to the Adult Protective Services agencies that exist in the U.S. to handle these cases.
This is one matter in which Canadian policy-makers should be looking to imitate the U.S. At the very least, there should be a central point of contact that Canadian firms and advisors can turn to when they suspect that a vulnerable client is being abused so that proper help can be sought.
At the same time, several U.S. states have enacted legislation that provides legal support for firms and individuals to report suspected abuse and to intervene to prevent potentially abusive transactions without fear of legal repercussions. This leads to another matter in which Canadian policy-makers should take a cue from their U.S. counterparts: empowering financial services firms to take action in defence of vulnerable clients.