A bill pending in the Senate would authorize fund companies to delay redemption requests if they suspect the investor is being exploited.

Reported by Kenneth Corbin

A coalition of prominent financial trade groups is calling on lawmakers to advance legislation that would enable asset managers to intervene when they suspect an elderly client is being exploited.

The bill, the Financial Exploitation Prevention Act, would empower investment companies and their transfer agents to delay the redemption period for requests made by seniors they reasonably believe are the victims of abuse.

The bill passed the House in 2023. The trade groups—the Financial Services Institute, the Investment Company Institute, the Insured Retirement Institute, and Sifma—are calling on the Senate to take up the measure and send it to President Biden to sign into law. The Senate bill, introduced in May 2023 and backed by Bill Hagerty (R., Tenn.) and Jon Tester (D., Mont.), has languished in the Banking Committee and not yet come up for a markup.

“With the increase in new technologies, including AI, financial fraudsters are growing more sophisticated in their schemes to defraud seniors,” says FSI President and CEO Dale Brown. “Financial advisors often serve as the first line of defense in detecting and preventing elder financial abuse and fraud, and this legislation equips our members with the necessary tools to best protect senior clients.”

Read full report: https://www.barrons.com/amp/advisor/articles/elder-abuse-senate-bill-investing-d269a00b