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Investing

Establishing a Trusted Contact

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Is your financial firm asking you for a “trusted contact”? Are you wondering why? We asked them to ask you!

Your financial firm may request that you give them the name and contact information of a trusted contact. While it is not mandatory that you do so, FINRA, the North American Securities Administrators Association (NASAA) and staff from the SEC Office of Investor Education and Advocacy urge you to consider providing the name of someone you trust as a contact on your accounts.


What is a trusted contact?
A trusted contact is a person you authorize your financial firm to contact in limited circumstances, such as if there is a concern about activity in your account and they have been unable to get in touch with you.

A trusted contact may be a family member, attorney, accountant or another third-party who you believe would respect your privacy and know how to handle the responsibility. You may establish more than one trusted contact.

Who should have a trusted contact?
We suggest a trusted contact for anyone who has an investment account.

Why would you add a trusted contact to your account?
Among other things, having one or more trusted contacts provides another layer of safety on your account and puts your financial firm in a better position to help keep your account safe.

Naming someone as a trusted contact does not give that person any authority to act on your behalf, execute transactions or engage in activity in your account.


How would having a trusted contact help me?
Maybe you are traveling. Maybe you have been displaced by a natural disaster. Maybe there is a concern about fraud. Or maybe you are having a health issue. A trusted contact can help your firm connect with you.

A trusted contact may be asked to confirm your current contact information, health status or the identity of any legal guardian, executor, trustee or holder of a power of attorney. U.S. broker-dealers are required to provide and other financial firms may provide a written disclosure that lays out these details.

What authority does a trusted contact have on your account?
Designation as a trusted contact does not provide the designated person with authority to make transactions in your account and does not make that person a power of attorney, legal guardian, trustee or executor.

By designating a trusted contact, you are authorizing the firm to contact someone you trust and disclose information about your account only in limited circumstances. A firm may only disclose reasonable categories of information with a trusted contact, including information that will assist the firm in administering the customer’s account.

Unless separately authorized, a trusted contact:

  • cannot make trades in your account and
  • cannot make decisions about your account.

 A trusted contact is simply someone who can help your financial firm help you, if needed.

How can you add a trusted contact to your account?
You can contact your financial firm or investment professional and ask to add a trusted contact to your account at any time! You can also ask your financial firm to change or update your trusted contact information at any time.

You may be asked to add a trusted contact when you log on to your investment account online. Your financial firm may send notices to you, via email or regular mail, that include instructions for adding a trusted contact to your account. Before clicking on any link in an email notice about a trusted contact, make sure you verify that your firm sent the email.

If you decide to name a trusted contact, you might want to reach out to them in advance to let them know.

If you haven’t yet named a trusted contact, add one today!

Do you have more questions about your investment accounts? You can call the following for assistance:

  • FINRA Securities Helpline for Seniors® at 844-57-HELPS (844-574-3577)
  • Your state or provincial securities regulator (contact information is here)
  • The SEC’s Office of Investor Education and Advocacy (contact information is here)

 

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