Financial fraud targeting older adults continues to increase, making investor protection an increasingly important responsibility for RIAs. According to the Federal Trade Commission, reported fraud losses among adults age 60 and older increased from approximately $600 million in 2020 to $2.4 billion in 2024.
The FBI reported even higher losses in 2025, with 201,266 complaints from investors over age 60 and total losses reaching $7.748 billion. Investment scams accounted for the largest share of those losses, making fraud prevention an increasingly important part of client service.
How Should RIAs Use Trusted Contacts?
Trusted contacts give advisors another way to respond when a client may be at risk. FINRA Rule 4512 requires firms to make reasonable efforts to collect trusted contact information when opening or updating client accounts. Reviewing this information during annual client meetings helps ensure advisors can quickly reach a designated person if concerns arise.
What Warning Signs Should RIAs Watch For?
Large withdrawals, repeated transfer requests, or transfers to unfamiliar accounts may indicate financial fraud. Changes in client behavior or unusual secrecy around financial decisions can also signal a problem.
Firms should establish clear review procedures so unusual transactions receive additional attention before funds leave the account.
What Procedures Should RIAs Have in Place?
Every firm should maintain written procedures for responding to suspected financial fraud. FINRA Rule 2165 allows temporary holds on certain transactions while concerns are reviewed, trusted contacts are notified, or additional reporting is considered. Proposed FINRA rule changes expected in 2026 would expand these protections.
What Overlooked Areas Can Help RIAs Protect Clients?
Protecting client assets also means helping clients recover money they may not know they are entitled to receive.
Securities class action settlements totaled approximately $8 billion in 2025, yet many eligible claims went unfiled because identifying cases and filing claims required significant manual work. Platforms such as 11th.com automate this process and deposit settlement proceeds directly into client accounts, helping advisors recover client assets with minimal administrative effort.
What Should RIAs Prioritize in 2026?
As fraud losses continue to rise, firms should regularly review trusted contacts, monitor unusual account activity, and include fraud prevention in ongoing client reviews. These practices can help protect older clients while supporting advisors' fiduciary responsibilities.
FAQ
Why should RIAs protect older clients from financial fraud?
Fraud losses among adults over 60 continue to rise and can significantly reduce retirement assets.
How can RIAs help prevent financial fraud?
RIAs can review trusted contacts, monitor unusual transactions, and establish clear fraud response procedures.
What warning signs should RIAs look for?
Large withdrawals, transfers to unfamiliar accounts, and sudden changes in client behavior may indicate fraud.
What FINRA rules should RIAs know?
FINRA Rules 4512 and 2165 help firms collect trusted contacts and place temporary holds on suspicious transactions.
What overlooked opportunities can help protect client assets?
Securities class action recoveries can help clients reclaim eligible settlement funds that might otherwise go unclaimed.
