New Legislation Aims to Stop Elder Financial Abuse Before It Starts

Financial advisors are often the first to notice something is wrong. A client who suddenly wants to wire a large sum to someone they've never mentioned before. A withdrawal request that doesn't match years of established behavior. Until now, advisors who spotted these warning signs had limited legal ability to act on them.

That's beginning to change. The U.S. House of Representatives recently passed the Financial Exploitation Prevention Act by a vote of 414-2, giving advisors and financial institutions new authority to pause suspicious transactions before a client loses their savings to fraud. The bill now moves to the Senate.

Evermay Senior Wealth Advisor Joni Alt was asked to weigh in on what the legislation means for advisors and the families they serve, and her perspective was featured in a recent WealthManagement.com article on the bill.

What the Financial Exploitation Prevention Act Does 

If passed, the legislation will amend the Investment Company Act of 1940, allowing registered open-end investment companies (such as mutual funds) and transfer agents to delay the redemption of redeemable securities by up to 15 business days, if they reasonably believe an investor is being financially exploited. That window can be extended by another 10 business days, or longer, if a state regulator or court gets involved.

The standard here matters. A reasonable belief of exploitation is required, not a vague hunch, so legitimate transactions still move forward without unnecessary delay.

Who These Protections Cover

The bill applies to what it calls "specified adults," a group that includes anyone 65 or older along with vulnerable adults whose mental or physical impairments limit their ability to protect their own financial interests. This isn't a blanket rule for all clients. It's a targeted safeguard for the people most likely to be targeted.

An Advisor's View From the Front Lines

Joni has spent her career helping clients plan for the future, and that work increasingly includes conversations about protecting against fraud. In her comments to WealthManagement.com, she pointed out that this legislation strengthens advisors' ability to protect clients from exploitation while still respecting their financial independence. She also connected it to something Evermay already encourages: establishing a trusted contact and talking through, in advance, how financial decisions should be handled if cognitive decline or another vulnerability arises down the road.

You can read Joni's full comments and the rest of the WealthManagement.com coverage here.

Why This Matters for Your Family

Fraud targeting older adults has grown sharply worse. Scammers now use tactics as sophisticated as AI-generated voices and spoofed phone numbers to impersonate government agencies, tech support, and law enforcement. The financial damage can undo decades of careful saving in a matter of hours.

A law like this gives advisors real tools, but the strongest protection has always come from planning ahead. Waiting until a scam is already underway is the hardest possible time to build a strategy for stopping it.

What You Can Do Now

You don't need the Senate to act on this bill to put good protections in place. Consider these steps, whether for yourself or a parent:

• Name a trusted contact on your accounts, someone your advisor can reach out to if something looks off.
• Talk openly with family about how financial decisions should be handled if health or cognitive changes make it harder to manage things independently.
• Set up account alerts for large withdrawals or unusual activity, so red flags surface quickly instead of months later.
• Revisit power of attorney documents periodically to confirm they still reflect your wishes.

None of these steps require complicated paperwork, but they do require proactive planning and transparent conversations with your family or loved ones.

Let's Put a Plan in Place

Protecting your family's financial future involves more than smart investing. It means having a plan in place for the unexpected, including the risk of fraud or exploitation as you or a loved one gets older. If you'd like to talk through trusted contacts, powers of attorney, or how to start this conversation with an aging parent, reach out to Evermay.

Pass This Along to Someone Who Needs It

If this piece was useful, consider sharing it with a family member who has aging parents or grandparents, or with anyone who could use a reminder to put these protections in place. A short conversation now can help prevent an even harder conversation down the road.