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Elder financial abuse by financial advisors is one of the fastest-growing forms of fraud in the United States. In 2024, Americans aged 60 and older filed 147,127 fraud complaints with reported losses totaling $4.885 billion, a 46% increase from 2023. Behind many of these cases is a trusted financial professional who exploited their position to steal from or mislead a vulnerable client.
If you or a family member has been the victim of financial abuse by a broker or investment advisor, you may have the right to recover those losses. This guide explains how elder financial abuse happens, the warning signs families should watch for, and the legal options available through FINRA arbitration.
Elder financial abuse occurs when a financial professional, such as a stockbroker, investment advisor, or financial planner, takes advantage of an older client for personal financial gain. This goes beyond ordinary investment losses from market fluctuations. It involves conduct that violates the advisor’s legal and ethical obligations to the client.
Common forms of elder financial abuse by advisors include:
Older adults are disproportionately targeted for financial abuse for several reasons.
Retirees and near-retirees often have significant savings built over a lifetime, including retirement accounts, pensions, and investment portfolios. These concentrated assets make them attractive targets for advisors looking to generate large commissions or fees.
Age-related cognitive decline can affect an investor’s ability to understand complex financial products, track account activity, or recognize when something is wrong. Some advisors exploit this vulnerability by recommending products the client does not fully understand.
Many older investors rely heavily on their financial advisor, sometimes as one of their primary trusted relationships. This trust can be exploited, especially when clients are isolated from family members who might notice red flags. Widowed individuals managing finances alone for the first time are particularly vulnerable.
Many victims of elder financial abuse feel ashamed or embarrassed about being deceived. Others may not realize they are being exploited, or they may fear the consequences of reporting someone they trusted. This reluctance allows the abuse to continue and makes it harder to detect.
Families and caregivers should watch for these indicators that a financial advisor may be exploiting an older loved one:
Multiple layers of regulation and law protect older investors from financial abuse.
The Financial Industry Regulatory Authority (FINRA) has implemented specific rules to protect senior investors:
Most states have enacted laws specifically addressing elder financial exploitation. These laws may impose mandatory reporting requirements on financial professionals who suspect abuse and provide civil and criminal penalties for perpetrators.
At the federal level, the Senior Safe Act provides immunity to financial professionals who report suspected exploitation in good faith, encouraging early detection and intervention.
When a broker or brokerage firm violates its obligations and causes financial harm to an elderly investor, the investor (or their family) can pursue recovery through FINRA arbitration. This is a private dispute resolution process that is often faster and less costly than traditional litigation.
If you suspect that a financial advisor has exploited an older family member, taking prompt action is critical.
Gather all available financial records, including account statements, trade confirmations, correspondence with the advisor, and any notes about conversations. Preserve emails, text messages, and voicemails. The more documentation you have, the stronger the potential case.
An attorney experienced in securities arbitration can evaluate the situation and determine whether the advisor’s conduct gives rise to a legal claim. This evaluation is typically done at no cost to the investor.
Most brokerage account agreements require disputes to be resolved through FINRA arbitration. Your attorney will file a Statement of Claim with FINRA, participate in arbitrator selection, conduct discovery, and present your case at a hearing. If successful, the arbitration panel can award compensatory damages, interest, and in some cases, attorney fees.
In addition to pursuing a legal claim, consider reporting the abuse to:
FINRA arbitration claims must generally be filed within six years of the event giving rise to the dispute. However, acting quickly preserves evidence and improves the chances of a successful recovery. Do not wait to consult with an attorney.
The Frankowski Firm focuses exclusively on securities fraud and investment misconduct, with over 25 years of experience representing investors who have been harmed by unethical brokers and advisors. The firm’s founder, Richard S. Frankowski, is a recognized authority on FINRA arbitration and has recovered millions of dollars for clients across the country.
Elder financial abuse cases are a priority for the firm because of the devastating impact on victims and their families. Many elderly investors lose retirement savings they cannot replace, affecting their quality of life and financial security for the remainder of their years.
The Frankowski Firm handles all elder financial abuse cases on a contingency fee basis. There are no upfront costs, no hourly fees, and no financial risk to you. Call 888-741-7503 for a free, confidential consultation.
Start by gathering any available financial documents, including account statements, trade confirmations, and correspondence. Contact a securities attorney for a free evaluation of the situation. You can also report suspected abuse to FINRA, your state securities regulator, and Adult Protective Services. Acting quickly is important to preserve evidence and protect remaining assets.
Yes. A family member with legal authority, such as power of attorney or guardianship, can file a FINRA arbitration claim on behalf of an elderly investor. In cases where the investor has passed away, the estate or heirs may be able to pursue the claim.
The Frankowski Firm handles these cases on a contingency fee basis, which means there are no upfront costs. You only pay a fee if the firm successfully recovers money for you or your family member.
Through FINRA arbitration, investors may recover compensatory damages (the actual financial losses), interest, and in some cases, attorney fees and costs. The arbitration panel determines the appropriate amount based on the evidence presented.
Yes. Elder financial exploitation can be prosecuted as a criminal offense under state and federal laws. However, criminal prosecution and civil recovery through FINRA arbitration are separate processes. You can pursue financial recovery through arbitration regardless of whether criminal charges are filed.
Elder financial abuse is significantly underreported. In 2024, Americans aged 60 and older filed over 147,000 fraud complaints totaling nearly $5 billion in losses. Many cases go unreported because victims feel ashamed, do not realize they are being exploited, or fear retaliation from the person abusing them.