Protecting Senior and Vulnerable Investors: Compliance Strategies for Today's Risk Environment

In an NSCP Currents Live webinar, Doug Baxley, Chief Compliance Officer and Partner at Merit Financial Advisors; Andrew Mount, Counsel at Eversheds Sutherland (US) LLP; and Crystal Trout, Managing Director at Baker Tilly US, explored how firms can strengthen their programs to protect senior and vulnerable investors from financial exploitation.

As fraud schemes become increasingly sophisticated—and regulators continue to emphasize investor protection—the panel discussed practical compliance strategies firms can implement to identify red flags, respond appropriately, and meet evolving regulatory expectations.

Key Takeaways

An Aging Population Means Greater Risk

Older Americans control an increasing share of U.S. wealth, making them frequent targets for financial exploitation. As fraud continues to grow in both scale and sophistication, senior investor protection has become a central focus for regulators and compliance professionals alike.

Understand the Regulatory Framework

The panel discussed the importance of understanding the multiple regulatory frameworks that govern senior investor protection, including the Senior Safe Act, FINRA Rules 2165 and 4512, state financial exploitation laws, state Adult Protective Services requirements, and firms' broader fiduciary and Regulation Best Interest obligations.

Training and Documentation Are Critical

Effective compliance programs rely on more than written policies. Firms should provide ongoing training that reflects today's fraud landscape—including AI-enabled scams and social engineering tactics—while ensuring employees know how to recognize concerns, document observations, and respond appropriately.

Recognize the Warning Signs

Behavioral changes, unusual withdrawals, new third-party involvement, sudden changes in investment objectives, and requests involving urgency or unfamiliar recipients can all indicate potential financial exploitation. Firms should have clear escalation procedures that emphasize pausing, investigating, documenting, and escalating concerns before processing transactions.

Final Takeaway

Protecting senior and vulnerable investors is both a regulatory obligation and an opportunity to strengthen client trust. Firms that invest in comprehensive training, well-defined procedures, and proactive oversight will be better equipped to identify exploitation, respond effectively, and protect those who need it most.

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