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Who Do You Trust? Protecting Your Investments

Alexa Kane, CFP®, CDFA™
September 19, 2019

Financial fraud and exploitation are growing problems in the U.S., especially for our aging population. Protecting all of our investors, but especially those who are most vulnerable, is a top priority for M.J. Smith & Associates.

Last year, Financial Industry Regulatory Authority (FINRA) Rule 4512 (Customer Account Information) became effective. It is the first uniform, national standard to protect senior investors from fraud. The rule established the requirement that firms make their best effort to obtain the name and contact information of a trusted contact person for all new and existing clients.

A trusted contact is intended to be a resource for firms as they handle customer accounts, protect assets, and respond to possible financial exploitation of any vulnerable investors. Trusted contacts cannot take action in an account.

[Note: The trusted contact rule is different from having a Power of Attorney.]

The provision also allows firms to investigate any matters of concern and reach out to the client, the trusted contact and, as appropriate, law enforcement or adult protective services, before disbursing funds when there is a reasonable belief of financial exploitation.

This measure is so critical because of the difficulty investors face in trying to recover funds that they have inadvertently sent to fraudsters and scam artists.

M.J. Smith & Associates will be complying with the requirement by asking our clients to either provide the name and contact information of a trusted contact person, or affirmatively opt-out.

The Importance of Protecting All Clients

A trusted contact is important information for us to have regardless of your age. With this contact information, we can better protect you from financial exploitation.

We are in the process of having our advisors confirm that all clients have a trusted contact listed in their file. If we do not have one on file for you - or feel it may be time to update our records - our team will be reaching out to obtain this information for all new and existing clients. While it is never our intention to bother you unnecessarily, gathering the trusted contact information from you is a federal requirement, and the ultimate goal is to provide all of our clients with a sense of security as we work collaboratively with you to plan for your future.

Please don’t hesitate to contact your M.J. Smith & Associates advisor with any questions.

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The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.This information does not purport to be a complete description of the developments referred to in this material. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

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