The Financial Industry Regulatory Authority, the North American Securities Administrators Association and the U.S. Securities and Exchange Commission have partnered together to encourage investors to setup a trusted contact at their financial institutions.
The FINRA under rule 4512 requires members to ask customers to appoint a trusted contact when they open or update an account.
A customer is not required to setup a trusted contact.
What is a trusted contact?
A trusted contact is a person you appoint that the financial firm can reach out to if there is a problem with your account and they are unable to contact you.
The contact can be a trustworthy friend, family member, caregiver, attorney, or another person 18 years of age or older. You can have more than one trusted contact and you can add or change a trusted contact at any time.
A trusted contact cannot access or make changes to your account. They have no authority to act on your behalf. Their role is very limited. They are just a point of contact between you and your financial institution to protect you from fraud.
In the event your account has been compromised in some way you must act quickly to prevent financial loss or identity theft. If the financial institution is unable to reach you immediately, they can call your trusted contact so that they can alert you to the potential problem.
Why is it important to appoint a trusted contact?
Identity and financial theft are a major problem. By appointing a trusted contact, it adds another layer of security to your account.
For seniors it is important to add a trusted contact before any health or cognitive issues arise that may prevent them from making decisions about their account.
How can you add a trusted contact?
When you open a new brokerage account you will be asked if you would like to appoint a trusted contact.
If you already have an account, some brokerage firms are contacting their customers asking if they would like to add a trusted contact. Be aware that scammers are taking advantage of the trusted contact service. Never respond to an email or phone call from someone claiming to be a financial firm. Instead call the firm directly or log in online to make changes to your account.
You can add a trusted contact at any time by calling your financial institution or by logging into your account online.
You will need to know the persons full name, phone number and physical address. Any additional contact information is also helpful such as an email address.
In what situations would a financial firm reach out to a trusted contact?
In the event they are unable to reach you they will call your trusted contact if they notice any uncharacteristic changes to your account such as large or repeated withdrawals or transfers.
Any sudden or unexpected changes to financial documents.
If they notice you are acting in an unusual manner that may signal a problem with your health or wellbeing.
If they suspect any kind of financial exploitation.
Be safe. Contact your financial institutions today to add a trusted contact to your account.
The Tech Minimalist 