New Jersey law now requires financial advisors to report financial exploitation of seniors.

On January 13, 2020, New Jersey Governor Murphy signed the "Safeguarding Against Financial Exploitation Act," which establishes additional protections for seniors from financial exploitation.

The bill defines an eligible adult as a person 65 years of age or older or a person subject to the "Adult Protective Services Act," P.L.1993, c.249 (C.52:27D-406 et seq.).

The bill provides that when a qualified individual, defined as any agent, investment adviser representative or other person who serves in a supervisory, compliance, or legal capacity for a broker-dealer or investment adviser, believes that financial exploitation of an eligible adult has occurred or is being attempted, the qualified individual should:
  • notify the Bureau of Securities in the Division of Consumer Affairs in the Department of Law and Public Safety and the applicable county adult protective services provider;
  •  notify any third party previously designated by the eligible adult, unless the third party is the party suspected of the financial exploitation; and
  • provide access to or copies of records that are relevant to the suspected or attempted financial exploitation to agencies charged with administering state adult protective service laws and to law enforcement.
The Bill defines "financial exploitation" as:
  1. the wrongful or unauthorized taking, withholding, appropriation, or use of money, assets or property of an eligible adult; or
  2. any act or omission taken by a person, including through the use of a power of attorney, guardianship, or conservatorship of an eligible adult, to:
    • obtain control, through deception, intimidation or undue influence, over the eligible adult's money, assets or property to deprive the eligible adult of the ownership, use, benefit or possession of his or her money, assets or property; or
    • convert money, assets or property of the eligible adult to deprive such eligible adult of the ownership, use, benefit or possession of his or her money, assets or property.
If the advisor suspects such abuse, the advisor MAY delay a disbursement from relevant account(s).

The Bill also provides that the advisor who makes the disclosure in good faith shall be immune from administrative, civil or criminal liability.

This is a huge win not just for New Jersey Seniors, but also for advisors who are now free to do the right thing to protect their clients.