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PIABA Bar Journal

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Aging is inevitable and impacts everyone. The risk of a person developing cognitive impairment or some other incapacity affecting daily life increases with each passing year. While some will live long lives without suffering from cognitive decline, others will not be so fortunate. One thing is clear: seniors have the greatest risk of developing some form of impairment that will impact their ability to make their own decisions and that will put them at risk of fraud by predators or of harm by well-intentioned but ill-informed persons seeking to help them. As lawyers representing clients in FINRA proceedings, PIABA members see this problem daily and are uniquely positioned to see it from nearly every angle.

Cognitive decline and aging are significant concerns in this country. Persons aged 65 and older represent the fastest growing segment of the U.S. population. Approximately 10,000 people will turn age 65 every day for the next 15 years. By 2030, 1 in 5 Americans (approximately 72 million people) will be over 65. Those over 65 hold 70% of the nation’s wealth.

The magnitude of the aging population in the United States, coupled with its collective wealth, makes fraud concerning senior investors a significant issue. In addition to being a prime target for fraud, this exploding demographic is particularly vulnerable to investment fraud because seniors are at a time in their lives when they cannot meaningfully add to their retirement savings, yet have significant needs. Unfortunately, seniors are most at risk of abuse or fraud at home, with over 40% of abusers identified as family, spouses, or caregivers. Sadly, “trusted professionals,” specifically including attorneys, financial professionals, and “fiduciary agents” are among the largest categories of perpetrators. The risk of fraud or abuse at the hands of family members or trusted professionals is even more acute given the reality of how seniors interact with the financial system post-retirement.


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Reprinted with the permission of Public Investors Arbitration Bar Association (PIABA). Elissa Germaine, Nicole G. Iannarone & Teresa Verges, A 360 Degree View of Roles and Responsibilities Concerning Diminished Capacity: Financial Advisers’ Obligations to Clients, Lawyers Representing Clients, and Lawyers Preparing Their Practices, PIABA B.J., Vol 23, No. 2 (2016).



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