The SEC’s Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) are issuing this Investor Bulletin to urge investors to consider adding a “trusted contact person” to their brokerage account.
When you open a new retail brokerage account or update your account information, your brokerage firm will request that you give them the name and contact information of a “trusted contact person.” While you are not required to provide this information, there are several important reasons to give your investment professional the name of someone you trust, and the SEC’s Office of Investor Education and Advocacy, FINRA and NASAA urge you to consider the request.
What is a “trusted contact person?”
A “trusted contact person” is like an emergency contact — a person you authorize your brokerage firm to contact in limited circumstances, such as if your investment professional has trouble reaching you or has a reasonable belief that your account might be exposed to possible financial exploitation.
A trusted contact person must be age 18 or older. They may be a family member, close friend, attorney, accountant or another third party you believe would respect your privacy and be willing to help. You may also choose to add more than one trusted contact to your account. Finally, you may change your trusted contact in your account as often as you wish.
Why would you add a “trusted contact person” to your brokerage account?
Adding a trusted contact person to your account puts your brokerage firm in a better position to keep your account safe. For example:
- If your brokerage firm cannot reach you, a trusted contact person may help your firm ensure that your current address and contact information are correct.
- A trusted contact person may help your brokerage firm respond to possible financial exploitation or fraud in your account and protect your account’s assets.
- If your brokerage firm suspects that you are experiencing a health issue, a trusted contact person may help your investment professional protect your account’s assets.
- A trusted contact person may help your brokerage firm verify the identity of any legal guardian, executor, trustee or holder of a power of attorney on your account.
What authority does a trusted contact have on your account?
Naming someone a trusted contact person only allows your brokerage firm, in limited circumstances, to contact that person to discuss certain information about your account.
Naming someone a trusted contact person on your account:
- does not give that person any authority to learn about your account balance, execute trades or engage in any other transactions in your account;
- does not give that person any authority to make decisions about your account; and
- does not make that person a power of attorney, legal guardian, trustee or executor.
How can you add a “trusted contact person” to your brokerage account?
Brokerage firms may ask you to add a trusted contact person when you open a new brokerage account or when you access your existing brokerage account. Many brokerage firms send notices to you, via email or regular mail, that include instructions for adding a trusted contact person to an account. Before clicking on any link in an email notice about a “trusted contact person,” make sure you verify that your brokerage firm sent the email.
If you would like to add a trusted contact person to your brokerage account, contact your firm or your investment professional at any time and ask how to add a trusted contact person to your account.
Additional Resources
Investor Bulletin: FINRA’s New Account Protection Rule - Trusted Contacts
Download Trusted Contact Factsheet
FINRA Investor Insights: Three Resources for Senior Investors
FINRA, NASAA & SEC staff: Trusted Contacts
NASAA: Serve Our Seniors Website and NASAA: Senior Issues Website on Trusted Contacts
Call OIEA at 1-800-732-0330, ask a question using this online form, or email us at Help@SEC.gov.
Call the FINRA Securities Helpline for Seniors® at 844-57-HELPS (844-574-3577).
Contact your state securities regulator.
Visit Investor.gov, the SEC’s website for individual investors.
Visit FINRA.org/investors for more information about saving and investing.
This Investor Bulletin represents the views of the staff of the Office of Investor Education and Advocacy. It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”). The Commission has neither approved nor disapproved its content. This Investor Bulletin, like all staff guidance, has no legal force or effect: It does not alter or amend applicable law, and it creates no new or additional obligations for any person.
