Investors vulnerable must be better protected in Canada

Photo: Kirby Hamilton, Getty Images
Abuse “physical or financial” is the third of the cases reported on line Abuse Help Seniors.

Investors vulnerable, including the elderly, need to be better protected against financial exploitation, as in the case of abuse and cognitive loss increases, say the authors of a report that suggests that the industry and the authorities to focus truly on this issue.


In addition to submitting recommendations to improve the protection of investors, and to allow the reporting of problematic situations, the report from FAIR Canada and the Canadian Centre for Elder Law (CCEL) wonders whether it should not also create an agency wide adult protection.


It is not easy to adequately detect the situations which merit reporting, the report said. In addition, the industry representatives who are in direct contact with investors are caught between the duty of confidentiality and the legal consequences of deviating from their mandate.


According to Marian Passmore, one of the coauteures FAIR, the organizations consulted, including investment firms and other industry groups, support the recommendations. “It is rare. This is not something that some sectors were challenging. Agreement and consensus are wide,she said in an interview. I think that companies have to deal with this issue, each from their side. “


According to a study of 2015 cited in the report, a little more than 5 % of the elderly had been victims of financial exploitation. This did not include cases of loss of autonomy.


Among the report’s recommendations, it is suggested :


companies to make a “reasonable effort” to obtain the name of a contact person in trust for each client, which may be notified in cases of suspected abuse or cognitive loss, “as long as that person is not herself suspected of abuse” ;


a company can suspend the transactions and withdrawals in cases of suspected abuse or when the client “has lost the capacity to give instructions” ;


that a sort of “haven legal” to be offered to service providers that transmit a report ;and


that the companies are better to their staff to raise their awareness of the realities of financial abuse, ageism and cognitive loss.


The report comes five months after the publication of a new Quebec plan of action to combat abuse against the elderly. Abuse “physical or financial” is the third of the cases reported to the online Abuse, Help Seniors, had been indicated in the document of the action plan.


“We hear talk about more, as people age and life expectancy lengthens,” says Jocelyne Houle-Lesarge, p.-d. g. of the Institut québécois de planification financière. “There are more opportunities, or bad luck I would say, that a situation like this occurs. “Financial planners are bound by a confidentiality agreement with their clients, she recalled. “It is in the code of ethics. We must also place the interests of the client ahead of his own, above all. If we see something, which it denounces ? And here one breaks the obligation of confidentiality. “


The work of the AMF


“We are going to take note of it and read it with much interest “, said the spokesperson of the Autorité des marchés financiers du Québec, Sylvain Théberge. The AMF is currently working on a “guide of good practices” that should be released in 2018. This guide will be designed for companies in the financial services industry. “It is also committed to do the training for the industry and to produce an aide-memoire to help to detect situations of abuse. “


This checklist will not address only to the industry, but will also close. “Someone who, for example, might have a power of attorney for the investment account of the vulnerable person. It is known that, for a number of years, there are, unfortunately, of abuse and of abuse in this chapter, ” said Mr. Théberge.

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