As a financial advisor, you are likely exposed to a large amount of wealth held by older adults or what some state legislatures refer to as “specified adults” and “vulnerable adults.” This exposure is raising growing concerns among financial advisors about losses linked to the exploitation of vulnerable adults. How much is at stake? As of October 2024, the Federal Trade Commission notes nationwide losses may be as high as $61.5 billion for individuals in these categories.[1]
Since 2015, states across the U.S. have responded to this concerning trend, basing the statutes on a model act adopted by the North American Securities Administrators Association to “Protect Vulnerable Adults from Financial Exploitation.” According to the American Bankers Association, about half of U.S. states have legislation in place, known as a “hold” law, which encourages banks or RIAs and its representatives to temporarily suspend a transaction based upon a reasonable belief that a specified adult with an account will be or is the subject of financial exploitation.[2] Some iterations of this law permits financial advisors limited immunity from civil liability.[3] The primary benefit of this protection to financial advisors is the time it allows them to pause and investigate a transaction, which varies among states’ legislation.
The American Bankers Association found that in states where “hold” laws exist, banks and RIAs believe the legal privilege would be more effective if financial advisors had additional time to complete their investigations. On May 16, 2025, the Florida Securities and Investor Protection Act did so by amending its Protection of Specified Adults statute, where a maximum of 25 days from the date of the request was provided for the delay on the disbursement or transaction under the statute, financial advisors can now extend to a maximum 45 days from the date of the request. First and most significant, an established procedure must have been in place showing: the broker-dealer has developed training policies or programs regarding financial exploitation, trainings are completed and recurring to implement these policies or programs, and there are existing written procedures for the internal review process of alleged financial exploitation on senior clients. Next, within 3 days from the transaction request, the advisor must provide written notice to all parties authorized to transact business on the account and to any trusted contacts on the account (except where the trusted contact is engaged in the alleged exploitation.)
While most statutes existing today are only designed to provide immunity to broker-dealers and investment advisors, some states like Florida have broadened this privilege to banks. The above is only a summary of some state’s response to the growing issue, and you should contact one of our attorneys to learn if your state has enacted a similar statute, and how you can be protected.
[1] “FTC Issues Annual Report to Congress on Agency’s Actions to Protect Older Adults.” Federal Trade Commission. October 18, 2024. https://www.ftc.gov/news-events/news/press-releases/2024/10/ftc-issues-annual-report-congress-agencys-actions-protect-older-adults
[2] “State Hold Laws and Elder Financial Exploitation Prevention.” ABA Foundation. March 28, 2025. https://www.aba.com/-/media/documents/reference-and-guides/2025-sbfs-elder-law-survey-report.pdf?rev=a5327479843f4d4c9b1366c7ef43ddfa
[3] Like in Missouri. See Missouri Secretary of State’s Securities Division Senior Savings Protection Act. https://www.sos.mo.gov/securities/sspa