The next time you meet with your advisor, you may be asked to name a trusted contact person (TCP). Let’s look at what a TCP is, and how they can help protect your accounts.
What is a trusted contact person?
A trusted contact person (TCP) is someone your advisor can reach out to if they are concerned you are being financially exploited or are making poor decisions because of diminished mental capacity. For example, they may notice transactions or financial decisions that are unusual based on your past behaviour.
Do you have to have a TCP?
Your advisor is required to ask you if you’d like to name a TCP, and to make note of your decision. We recommend that you do so since your advisor is often in the best position to see changes in your financial behaviour. With a TCP, they have someone to contact who has your best interests at heart.
Who needs a TCP?
A TCP is a valuable additional layer of protection that can benefit anyone.
Here are some examples of when a TCP could help protect your accounts.
How is a TCP different from a POA?
A TCP is not the same as a power of attorney. A power of attorney (POA) gives someone else the authority to make financial decisions for you, either right away or if you become incapacitated. A TCP does not and will never have this authority. However, a TCP is someone else an advisor can reach out to, other than a POA, if they have concerns.
Who can be a TCP?
A TCP should be a trusted adult with no financial interest in your accounts. Typically, this is a close friend, family member or caregiver.
How do you set up a TCP?
Talk to your advisor about what is required to name a TCP and allow your advisor to share limited information with them. The paperwork is relatively simple. Keep in mind that you can change your TCP at any time.
Once you have a potential TCP in mind, think about how they’d react if your advisor called to discuss concerns about your recent financial decisions or memory lapses. Would they listen to your advisor with an open mind? Just as important, would you hear them out if they raised those concerns with you?
Share the above information with your potential TCP so they understand exactly what the role is and is not. For example, it is an opportunity to help protect you if you become financially vulnerable. It is not a licence to make decisions for you or to take away your control over your own financial affairs. From your advisor’s perspective, it’s also not authority to share information with the TCP about your financial accounts.
Remember that naming a TCP is one of the ways you can provide for an additional safeguard for your money and it’s an important part of good financial planning.
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Please note that only advisors who are qualified and approved financial planners can provide financial planning advise. Please check with your advisor.