Is My Client Being Scammed?

January 17, 2024 Financial Planning

Senior investors and vulnerable adults are at an increased risk of financial exploitation through misleading, deceptive or illegal practices. Scammers may manipulate clients into withdrawing funds from their investment accounts and, as their trusted Financial Professional, you should closely review and question requests that seem sudden or unusual.

Financial Exploitation and Abuse

Although anyone can fall victim to financial exploitation, senior investors and vulnerable adults are more susceptible given their age or circumstances. It is crucial Financial Professionals remain vigilant for signs a client is being deceived, intimidated or manipulated in regard to their money. Financial exploitation can include unauthorized use, taking, withholding or appropriating funds, assets or property, either by a person or an entity (i.e., power of attorney, guardianship or trustee).

Signs of a Scam

Signs a client's distribution requests might be related to a scam include:

  • A sudden or urgent need for funds
  • Frequent and unexplained distributions that contradict the client's established Investment Objective
  • Secretive demeanor or refusal to explain the intended use of funds being distributed
  • Communications with an unknown/unauthorized third party
  • Disregard for fees, penalties, and tax consequences of distributions
  • Expressions of fear, panic, and anxiousness regarding delayed distribution requests
  • Strange or unexplained changes in bank Information, beneficiary designations, or previously authorized individuals

While these signs don’t always mean a scam is happening, they could warrant additional conversations with your client. Avantax Financial Professionals should immediately report suspicious activity to the Avantax Compliance Department.

Additional Resources 

As a Financial Professional, you've likely had countless conversations with your clients regarding their desires and intentions with their money. Years of meetings and account reviews allowed you to become familiar with their spending and saving habits. Help them put practices in place to safeguard their finances — such as adding a Trusted Contact Person to their accounts, encouraging the use of direct deposit and automatic bill paying, or naming trustworthy individuals as power of attorney.

The following resources may be helpful if you need to report suspected financial abuse: