We’re Watching You

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Lawyers (like other professionals) are traditionally seen as delivering a service to meet a need for a reasonable price and then saying goodbye to the client – the one off transaction. But, should we be doing more, especially for our older clients?

In recent times particularly, we’ve had occasions to be concerned about the welfare of an older client owing to the dubious conduct of other people. We’ve then had to consider what we should do about it that doesn’t involve restricting our role to the standard service module above. In other words should we ‘blow the whistle’ on someone.

For a lawyer that can be an ethical challenge given our obligations of client privacy and confidentiality. Fortunately, we are assisted in this conundrum with very helpful ethical guidelines issued by our Law Societies.

I then started to wonder about how this issue might be dealt with in other professions such as accountants and financial advisers. In many ways they are similar to lawyers in the delivery of a service to a client. However, they are also different in that they can often have an ongoing relationship with a client that does not involve a simple one off transaction as is the case for most legal services. I see my accountant and financial adviser at least once a year.

As such, over time, they can be even better placed to discern adverse changes in their clients’ circumstances. In other words, they can feel, suspect or even know there is potentially something that is not right.

But what assistance do they have in determining what to do about a client they may be concerned about who is being taken advantage of or where things about the client just don’t seem right anymore? Very little, it seems, from my examination of the websites of such august peak bodies as the FPA, CPA or ICA.

That’s odd particularly because, in America, there are significant steps being taken to address financial advisors duties in these circumstances.

For example, the US Financial Industry Regulatory Authority (FINRA) issued a ruling to all its 632,000 financial adviser members, approved by the US Securities and Exchange Commission (SEC), which provides that:

  • A financial adviser who reasonably believes that ‘financial exploitation’ of a ‘specified adult’ has occurred or is occurring, may place a temporary hold on the disbursement of funds or securities from the account of the specified adult;
  • Financial exploitation’ means wrongly taking or withholding an adult’s funds, any act or omission by an EPOA or obtaining control of funds through undue influence;
  • A ‘specified adult’ is a natural person aged 65 and older who the adviser reasonably believes has a mental or physical impairment that renders the individual unable to protect his or her own interests.

This Ruling commenced almost as I write – on 5 February 2018.

I wonder what the FPA, CPA or ICA thinks about that?  Perhaps you should ask your accountant or financial adviser what they think.

Brian Herd
Recognised as one of the leading experts in Australia on elder law, aged care, retirement, estate planning and disability and a regular author, broadcaster and popular presenter on many elder law subjects and issues.