Ways a Trusted Contact Person (TCP) can protect your accounts

Have you met with your advisor recently and wondered why you were asked to name a trusted contact person (TCP)?

The 3 scenarios below show why Canadian securities regulators introduced the TCP rule and how having a TCP can add an extra layer of protection to your account.

Scenario 1: Elder financial abuse

Edna and Dennis were an elderly couple whose estranged son, Steven was their sole beneficiary and power of attorney.

The couple were married for 65 years when Dennis died suddenly from heart failure. In her despair, Edna tried to take her own life.

Steven, as power of attorney, took control of her investment portfolios and made significant changes to the holdings. Within a month, he had also sold her house and put Edna in a nursing home.

Steven made it difficult for her financial advisor to speak with Edna and discuss the changes to her investment portfolios.

Scenario 2: Romance scam

Gisele was divorced twice and alone when she met Jay online. They got along well, chatting and texting frequently. Even though he was busy with his importing business, he made time for her.

One day, Jay called Gisele in a panic and said his products were stuck in customs. Could she wire him $30,000 until he could fix the issue with his credit card company?

Gisele asked her advisor to move the money out of her investment account into her bank account. After wiring $30,000 to Jay, he became unreachable.

Scenario 3: Mental incapacity

After working for 40 years straight, Eugene was intent on enjoying his retirement. He and his partner often filled their calendar with camping, golfing and cycling.

On one of these trips, Eugene fell off his bike, seriously injuring his spine. He was forced to stop all future activities and became increasingly depressed. His partner found Eugene difficult to live with and left. Having built up his savings throughout his life, Eugene decided he now wanted to spend it all. When he met with his financial advisor, Eugene appeared unkempt and was unable to answer some routine questions.

Still, he insisted on cashing out his entire portfolio.

How a trusted contact person could make a difference

The TCP is a resource person that the financial advisor can contact in specific situations.

If there’s suspicion of financial abuse or exploitation, a change in your health or behaviour, or a change in your ability to understand and make financial decisions, being able to reach out to your TCP would help your financial advisor better understand the situation.

Rest assured that your financial information will never be disclosed to your TCP.