Canadian securities regulators recently introduced the Trusted Contact Person. The Trusted Contact Person initiative provides your registered financial advisor with a tool to help safeguard your account should they suspect you are experiencing financial exploitation or diminished mental capacity such that you are unable to make financial decisions.
What is a Trusted Contact Person (TCP)?
A Trusted Contact Person (TCP) is someone you authorize your financial advisor to contact in limited circumstances. It allows your financial advisor to know who you trust and who they have permission to contact when they are concerned about your well-being under specific situations. This could include:
- if your financial advisor needs to get in touch with you but can’t
- if your financial advisor has a concern you are vulnerable and being financially exploited
- if you are having a health issue and your financial advisor needs to confirm your well-being
- if your financial advisor needs confirmation of your legal representative(s)
For example, your financial advisor may contact your TCP when they simply can’t reach you because you have taken an extended vacation and forgot to inform them. Or, in a more complex situation, they may contact your TCP to ensure the validity of a request that is out of character if they believe you are vulnerable and being financially exploited.
What can my Trusted Contact Person do?
A TCP can help provide your registered financial advisor with information that might help safeguard your financial assets, but they:
- cannot authorize transactions on your behalf
- cannot make decisions on your behalf
- will not be given access to your detailed account information
You appoint a TCP to act solely as an additional resource to help your financial advisor make decisions about protecting your account. You can specifically outline in your client agreement when your TCP should be involved.
Who should be a Trusted Contact Person?
A TCP should be someone you trust and someone who is mature and can handle difficult conversations about your personal situation. Consider choosing someone who:
- will protect your interests
- will be comfortable talking to your financial advisor
- knows you well enough to notice changes in your personal situation
- is familiar with your support network
- agrees to take on the role
- is typically not involved in decisions about your finances, and preferably, is not your Financial Power of Attorney
Should I tell my Trusted Contact Person that my advisor may contact them?
It’s important to let your TCP know that you have appointed them as your Trusted Contact Person. This may help your TCP feel comfortable talking with your financial advisor if they are contacted. It’s also an opportunity to discuss your financial wishes and what is expected from them if they are contacted. Download You’re my Trusted Contact Person, a resource that can help your TCP know what is expected of them should they be contacted.
Consider whether you would like to arrange for a meeting between your financial advisor and your TCP. This way, if the time comes where your advisor has to reach out to your TCP, the two are acquainted and feel comfortable speaking with one another.
If your situation changes, you can contact your financial advisor at any time to add or update your TCP.
Why is it important to name a Trusted Contact Person?
It’s important for all New Brunswickers to consider this important tool. A health crisis may strike at any time, rendering a person vulnerable to financial exploitation or issues that might affect capacity to make financial decisions.
While naming a TCP on your account is optional, it can provide you peace of mind knowing your financial advisor has someone you trust to help them make decisions about protecting your account. Having a plan and trusted people in place now can help protect you and your financial wishes in the future. Speak to your financial advisor to learn more about naming a TCP.
A temporary hold is a tool that your financial advisor can use to help protect your assets. If your financial advisor has a reasonable belief that you are vulnerable and being financially exploited or if they have concerns about your mental capacity to make financial decisions, they may choose to place a temporary hold on your account. A financial advisor must take several steps when placing a hold on an account in these circumstances. It’s important to speak with your financial firm to learn more about how they will handle temporary holds. Watch our video to learn more: