Vulnerable investors lack protection

Regulations needed to empower advisors to intervene, report urges.

Rudy Luukko 27 November, 2017 | 6:00PM

Regulators need to do more to help financial advisors who want to protect their most vulnerable clients from being exploited or cheated, according to a joint report by the investor-advocacy organization FAIR Canada and the Canadian Centre for Elder Law (CCEL).

The report points to shortcomings in protection for vulnerable investors, most of whom are elderly, and who are subject to undue influence or have diminished mental capacity. The most common perpetrators are family members, friends and caregivers.

Through generic "case studies," the report cites six common types of abusers and scammers who prey on vulnerable investors. One of them is the new, younger "best friend" who insists she has a valid power of attorney and instructs the advisor to start selling the client's investments and cashing them out.

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About Author

Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.

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