Protecting Senior Investors from Scams Becomes Priority

From online romance schemes to fraud committed by trusted acquaintances, senior investors are increasingly falling victim to financial exploitation. At a Wednesday panel at FINRA’s 2026 Annual Conference, experts outlined practical steps firms can take to protect senior investors.

Elizabeth Yoka, the manager of FINRA’s vulnerable adults and seniors team, shared an example of a romance scam she encountered when working with the regulator’s senior helpline. A senior client had exhausted all of the funds in his bank account and was attempting to withdraw from his retirement account to send money to a supposed online match.

“He was going to lose over $500,000 because he was looking to send funds to the person that he had met online,” said Yoka.

A member firm escalated the situation to FINRA after exhausting its internal resources. When the firm tried to reach a trusted contact, the contact person turned out to be the client’s spouse, making a discussion about the online romance scam complex.

“The question comes to mind … How do you deal with these types of situations when you’re really trying to protect the customer?” Yoka said. “But at the same time, there [are] so many other family dynamics … that come into question.”

Identifying At-Risk Clients

Panelists said firms can better protect senior investors by recognizing characteristics that may signal heightened vulnerability to fraud.

Mike Duff, director of field supervision at Edward Jones, said advisers should be particularly attuned to clients who display certain behavioral or situational traits, including excessive generosity, which is a key indicator.

“People start to take notice when someone [who] has accumulated a lot of wealth is giving it away. That’s an opportunity for someone to step in and try to take advantage of that situation,” said Duff.

Another red flag can be a client who is overly reliant on others. This could include clients who are incapacitated or have powers of attorney arrangements, and also seniors who may need transportation assistance or someone who struggles making decisions on their own.

“They’re also very easily influenced, and someone can kind of coax them into doing something,” Duff said.

Another warning for Duff is “financial fragility,” when clients who may not have saved enough for retirement or took on excessive risk earlier in life feel uncertain about their financial future.

As financial anxiety increases, these clients may become more vulnerable to scams that promise quick returns or financial security.

“They may take additional risks, like [getting involved in] an investment scam, or potentially try to take a risk with … someone that they think is rich and fall for a romance scam,” said Duff.

Another risk factor can be disorganization in managing finances. Clients who are not closely tracking their accounts may be less likely to notice fraudulent activity.

“It’s the type of person that maybe wouldn’t even realize if $20,000, $40,000 or $100,000 was gone from their account,” he said.

In those cases, Duff said advisers should go beyond identifying the risk and assess what safeguards are in place.

“That’s someone that you want to have an additional conversation with,” Duff said. “Who else is keeping an eye on the asset that may be outside your firm.”

Rules to Know

Micah Hauptman, associate general counsel, regulatory practice and policy at FINRA, outlined FINRA rules firms should be aware of to help keep senior investors’ accounts secure.

FINRA Rule 4512, often called the “Trusted Contact Rule,” ensures firms have information on trusted connections for their clients. “The idea behind a trusted contact is to act as a resource for the firm, if concerns arise,” said Hauptman.

Additionally, FINRA Rule 2165 allows firms to place temporary holds on disbursements when there is a reasonable belief of financial exploitation involving adults who are age 65 or older, or that have a mental or physical impairment.

The rule provides a pause, giving firms time to investigate and involve authorities if necessary.

“The idea is to prevent losses before they happen,” Hauptman said.

Another rule highlighted by Hauptman, FINRA Rule 3241, governs situations in which registered representatives are named as beneficiaries or hold positions of trust for clients. The rule requires disclosure and firm approval to mitigate conflicts of interest in such cases.

Rules in Practice

Duff shared a case of a senior couple who befriended a neighbor who became a very close acquaintance and

began attending their appointments with their financial adviser.

“Fast-forward a little bit … this individual presented a power of attorney … where he could act on behalf of the clients,” said Duff. “This [person with] power of attorney started to exert a lot more authority and pushed the clients to distribute more money.”

The situation escalated when the neighbor sought to sell one of the couple’s homes and attempted to link personal bank accounts to their own account.

The firm ultimately placed a hold under Rule 2165 and separated the clients from the individual to better understand the situation.

“They [said] they were scared of him and that he threatened them a lot,” said Duff.

The firm then contacted the couple’s trusted contact, which was the couple’s child, and worked with adult protective services and law enforcement. Charges were eventually filed.

Rodnee Warr, executive director of elder client initiatives at Wells Fargo, described another client who was “a giver,” who was targeted in a scheme involving gold. Warr

said the client wanted to purchase gold through a legitimate commodities exchange and have it delivered to her home.

The client believed she was safeguarding assets, but in reality she was being scammed by fraudsters who claimed to be FBI agents in need of converting assets into gold.

The client’s Wells Fargo advisers intervened by contacting the client’s trusted contact and ultimately placing a hold on the transaction.

“She thought her financial adviser was under investigation and that she was protecting her assets,” Warr said, noting the prevalence of similar scams.

The FINRA Securities Helpline for Seniors is available to firms and advisers, Monday to Friday, from 9 a.m. to 5 p.m. Eastern Time, at 844-57-HELPS (844-574-3577).