Advisors Emphasize Early Planning as Key Defense Against Elder Financial Exploitation
From the desk of Jim Eccleston at Eccleston Law
Elder financial exploitation has reached crisis levels, according to InvestmentNews. Adults age 60 and older reported losing more than $7.7 billion to scams in 2025, a 59 percent increase from the prior year, according to the FBI's Internet Crime Complaint Center. The actual losses may be substantially higher because many incidents go unreported.
The U.S. House recently passed the Financial Exploitation Prevention Act of 2025 by a 414-2 vote. The legislation would allow mutual funds and transfer agents to temporarily place a hold of up to 15 days on a redemption request when they suspect financial exploitation. The bill now awaits Senate action.
But advisors who work with older clients say firms should not rely on legislation as their primary safeguard. Instead, they emphasize early planning, family communication, account monitoring and clearly defined authority.
Angelo V. Esposito Jr., founder and private wealth advisor at Harbor View Private Wealth, told InvestmentNews that his firm places a trusted-contact designation on every account. The trusted contact cannot conduct transactions but can receive a call when the firm identifies unusual activity.
Esposito also uses layered authority, including durable powers of attorney, springing provisions that activate under defined circumstances and co-signers for significant or unusual distributions. His team monitors warning signs such as sudden beneficiary changes, unfamiliar wiring instructions and urgent requests. Internal escalation procedures ensure that no single advisor makes a consequential decision alone.
Esposito believes these safeguards work best when families discuss them before a crisis occurs. Early estate planning can establish who may participate in financial decisions and under what circumstances, reducing uncertainty if a client later becomes vulnerable.
Arne Boudewyn, family governance and education advisor at Callan Family Office, similarly advocates for early preparation. He told InvestmentNews that families can strengthen their defenses through trusted contacts, clearly defined authority, periodic estate-plan reviews and coordinated oversight among advisors.
Boudewyn also emphasized the importance of preserving an older client's autonomy. When families establish decision-making procedures while a client remains capable, the client can gradually transfer responsibilities without feeling that relatives have suddenly taken control.
Dory A. Wiley, president and CEO of Commerce Street Holdings, urged advisory firms to strengthen their monitoring systems. He said advisors often encounter several warning signs before a suspicious transaction reaches a fund company.
Wiley supports safeguards such as trusted contacts, dual authorization for large wire transfers and staged authority that gradually expands a family member's involvement from account visibility to co-approval and, eventually, full discretion.
According to InvestmentNews, he also connected estate planning directly to fraud prevention. A revocable trust that establishes an incapacity standard and names a successor trustee can provide a framework for managing a client's affairs if circumstances change. Wiley said the proposed 15-day hold under H.R. 2478 could give fund companies and transfer agents additional time to respond to suspected exploitation, but strong planning may reduce the need for that intervention.
Jacob Taurel, managing partner at Activest Wealth Management, challenged the industry's tendency to treat diminished capacity primarily as a compliance issue. He argued that advisors should begin these conversations while clients remain fully capable of making their own decisions.
Taurel favors gradually increasing family involvement through measures such as adding a second signer to an account, providing a trusted family member with greater visibility and establishing a documented escalation process. He also considers changes in family communication or the sudden appearance of an unfamiliar financial professional potential warning signs.
Across these approaches, the advisors share a common view: protecting older clients requires more than reacting to suspicious transactions. Early conversations allow clients to establish their own safeguards while preserving their autonomy and dignity.
Legislative measures may provide an additional pause when exploitation appears, but effective planning can help ensure that advisors rarely need to use that last line of defense.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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