B.C. Securities Commission says a 'trusted contact person' can help vulnerable people avoid financial scams

The B.C. Securities Commission says registered financial advisors are in a unique position to notice signs of financial exploitation, vulnerability or diminished mental capacity through their relationship with clients – and there is a tool designed to help those in need.

Registrants should be asking clients about establishing a trusted contact person, or TCP, who the client's financial firm can contact in some circumstances, according to the regulator.

“This is part of a registrant's 'know your client obligations,'” says the B.C. Securities Commission’s manager of registrant compliance, Janice Leung.

The topics of conversation between a firm and a TCP are set out in writing through the client – and can include any time a registrant may be concerned about possible financial exploitation for the client.

“The TCP tool is tied to another tool in place for registrants to use, which is a mechanism for temporary hold,” says Leung.

“What we do expect is firms and registered individuals to have policy and procedure in place to help registrants identify scenarios where contacting a trusted contact person is perhaps appropriate and in more extreme cases having a temporary hold on a client’s account when there’s evidence of a financial exploitation taking place and that the client is a vulnerable client.”

The Canadian Securities Administrators recommend a TCP for anyone who has an investment account. TCPs cannot make trades or decisions about another client’s account.

A Comox Valley senior who fell victim to a scam that cost her life savings says she did not have a trusted contact person in place.

Peggy Christian and her family have been seeking accountability where it might exist and advocating for change where it may be due after she lost more than $100,000.

“We want people to be absolutely aware of this and how easy it is to be scammed and coerced no matter who you are,” says Christian’s sister Judy Huska. “And then we want the banks to tighten up their policies and procedures and their training for people so that they recognize when this is happening.”