Elderly investors are fraud targets. Here's how to protect your clients.

More older Americans are taking the bait from scammers, leading to record high losses. From 2020 to 2024, elder fraud quadrupled, reaching $2.4 billion in 2024 according to a Federal Trade Commission report.¹

Can't-miss investments, improbable love stories, impersonation scams—old cons have become increasingly sophisticated as AI and other technologies make it easier to trick people into handing over money or information. Older clients are also more vulnerable than ever as they face health challenges, changing family dynamics, and shrinking social circles. In a complex and predatory online world, your clients need you more than ever to help them protect their hard-earned savings.

Take these steps to proactively protect your clients from fraud—and show clients that your value goes beyond their portfolio.

Steps advisors can take to help prevent fraud

Protecting client assets from fraud requires a multifaceted approach. Here's what many advisors do to help clients stay safe.

• Train staff: Help staff spot signs of diminished capacity, coercion, abuse, or other red flags that financial decisions are not being made in your client's best interest.
• Establish protocols: Create written protocols to guide how your firm should respond if you or your staff notice suspicious activity.
• Provide client education: Help clients spot scams before they happen. Try hosting a client event led by a cybersecurity or fraud expert who can explain common tricks and what to look for online.
• Keep up with fraud trends: Technology moves fast, and fraudsters are often on the cutting edge. By checking in regularly with cybersecurity blogs and tech magazines, you may be able to catch the latest scam before it's too late.
• Get insurance: Fidelity bonds can replace lost client assets and protect your firm from catastrophic losses. Cyber insurance can help your firm recover from a cyber incident. Firms that custody with Schwab can find preferred pricing on RIA-focused providers through Schwab Affinity Services.
• Monitor account activity: Address updates, new phone numbers, and other account changes could be signs of an account takeover. Uncommon transactions can also be a red flag. As a general rule, if you see something suspicious, don't be afraid to make a phone call to your client to get more information.
• Suggest additional planning: Consider starting a conversation about establishing a Durable Power of Attorney or getting started on general estate planning. Helping them think through how life might change as they age can help smooth potentially difficult transitions.
• Be available for conversations: It never hurts to check in with your clients. By reinforcing goals and financial decisions, it can help prevent questionable choices or bring risky activities to the surface. You want your elderly clients to feel that they can come to you rather than getting in deeper with a scammer. 
   

What is a Trusted Contact?

For advisors and their clients who work with Schwab, one important tool for preventing fraud is asking clients to name a Trusted Contact on their Schwab accounts. A Trusted Contact is someone designated by your client whom Schwab can contact when something doesn't look right. This person is also authorized to:

• Confirm your client's current contact information.
• Discuss your client's mental or physical health status.
• Discuss activities or other possible red flags that might indicate your client is being financially exploited.
• Address other limited circumstances when permitted by law.

Establishing a Trusted Contact is optional. It does not give the person Power of Attorney or Durable Power of Attorney. They cannot view account information, execute transactions, or inquire about account activity unless they're given additional permissions. And only your client can add, update, or remove a Trusted Contact from their account.

A Trusted Contact should be close to your client, but ideally isn't someone who already conducts business on behalf of the client. Sadly, many people who take advantage of older people are family members or people who are closest to the victim, so involving more trusted people offers an additional layer of protection.
 

Be there when your clients need you most

Like you, we at Schwab care about the financial health and security of our clients. Proactive vigilance against fraud is a level of service that not only wins the hearts of clients, but it also protects your firm from a destabilizing event. Show your clients you're looking out for them while also looking out for the long-term health of your business. 

What you can do next

• If you custody with Schwab, ensure your clients have a Trusted Contact.
• Learn more about how we protect senior and vulnerable investors and browse resources to stay ahead of fraud and cybersecurity risks.
• Curious about how Schwab helps RIAs? Wealth services, technology, and business support are just the beginning. Whether you're exploring independence or considering a custodian swap, we're here to help you take your next step.