The One Name Missing From Your Financial Accounts

Think of a trusted contact as an emergency contact for your investment account.

You are giving your brokerage firm permission to reach out to that person in

certain limited situations.

For example, the firm might have trouble reaching you.

It might notice activity that raises concerns about possible financial exploitation.

It might need help confirming your current contact information.

Or it may have concerns that a health problem is affecting your ability to

manage the account.

The SEC, FINRA and state securities regulators have specifically encouraged

investors to consider adding a trusted contact to their brokerage accounts.

Now here is the part I want you to remember:

Your trusted contact does not get control of your money.

They cannot make trades.

They cannot withdraw funds.

They cannot suddenly see your account balance just because you named them.

They do not become your power of attorney.

They do not become your executor.

They do not become your guardian.

They are simply someone your financial firm may contact when something

unusual happens.

That is a very important difference.

You are 72 years old.

You have spent decades building an IRA.

Then one afternoon you get a phone call.

The caller says they are from your bank's fraud department.

They tell you someone is stealing your money.

They sound professional.

They already know your name.

They know your bank.

They may even know part of your account information.

Then they tell you that, in order to protect your money, you need to move it

immediately.

Maybe into another account.

Maybe through a wire transfer.

Maybe into cryptocurrency.

Maybe into some so-called “safe account.”

You are frightened.

And frightened people can move quickly.

Now imagine that your brokerage firm sees something that does not fit your

normal behavior.

A large transfer.

A strange request.

An unusual attempt to liquidate investments.

The firm tries to reach you.

You don't answer.

Perhaps you are still on the phone with the scammer.

Perhaps your phone number changed.

Perhaps you are sick.

Perhaps something else is wrong.

Without a trusted contact, the firm may have fewer options for reaching

someone who knows you.

With a trusted contact, it may be able to call the person you selected and say, in

effect:

“We are having trouble reaching Mike. Can you help us contact him?”

That extra phone call may not solve every problem.

But in the right situation, it could become incredibly important.

Financial fraud is no longer limited to badly spelled emails from strangers.

Today's scams can involve convincing phone calls, fake government officials,

fake bank representatives, romance scams, investment schemes and even

artificial intelligence that imitates someone's voice.

And older Americans remain major targets for financial exploitation.

FINRA says millions of older adults experience financial exploitation and lose

billions of dollars. It also warns that exploitation does not always come from

strangers. Sometimes the pressure can come from caregivers, relatives or other

people the victim already trusts.

That last part matters.

Because when most of us think about protecting our accounts, we think about

passwords.

Those are important.

But passwords protect the front door.

A trusted contact is more like giving the financial institution another number to

call if they see smoke coming from the house.

This is where the idea gets even more interesting.

Fraud is only one reason your brokerage firm may need that person.

The SEC says a trusted contact may also help when the financial firm needs to

confirm your address, cannot reach you, suspects you may be experiencing a

health issue, or needs to verify the identity of a guardian, executor, trustee or

someone holding a power of attorney.

Think about how many ordinary situations could create problems.

You go into the hospital unexpectedly.

You move and forget to update an account.

You change phone numbers.

You are traveling for several weeks.

Your email gets hacked.

A family member says they have authority over your money, and the financial

firm needs to confirm whether that is true.

Those are not wild scenarios.

Those are real-life situations.

And the older we get, the more valuable it becomes to have simple systems

already in place before we need them.

This may be the most important part.

Do not choose someone simply because they are related to you.

Choose someone because they are dependable.

The SEC says a trusted contact must be at least 18 years old and could be a family

member, close friend, attorney, accountant or another person you trust to

respect your privacy and help when needed. You can also name more than one

trusted contact.

I would look for five qualities.

Choose someone who:

That last one matters.

The purpose is not to give someone financial power.

The purpose is to create a reliable point of contact.

Your oldest child may be perfect.

Or they may not be.

Your brother may be perfect.

Or perhaps a trusted longtime friend would be better.

This is not about family rank.

It is about judgment.

This is one of the most important distinctions in the entire article.

A power of attorney may give someone legal authority to act for you,

depending on how the document is written.

A trusted contact does not.

Naming someone as a trusted contact does not give that person the right to

execute trades, move money or make decisions for you.

You may eventually need both.

They solve different problems.

Think of it this way:

Power of attorney:
“Under certain circumstances, this person may act for me.”

Trusted contact:
“If something seems wrong, you may call this person.”

Those are two completely different jobs.

Do not click blindly on an email asking you to “add your trusted contact.”

The SEC specifically advises investors to verify that any email about trusted

contacts actually came from their brokerage firm before clicking a link.

That is almost funny when you think about it.

A feature designed to help prevent fraud could itself be copied by scammers.

So keep this simple.

If you want to add a trusted contact, go directly to your brokerage firm's website

or app.

Or call your adviser or brokerage firm using a phone number you already know is

legitimate.

Do not use a phone number inside a suspicious email or text.

Here is what I would do this week.

Open each brokerage and retirement investment account you have.

Look under sections such as:

Profile

Account settings

Personal information

Beneficiaries

Security

or

Trusted contact

If you cannot find it, call the firm and ask:

“Do I currently have a trusted contact listed on my account?”

Then ask:

“How do I add or update one?”

That is it.

This does not require a major financial overhaul.

It does not cost hundreds of dollars.

It does not require moving your investments.

You are simply making sure the firm has another way to help protect you when

normal communication breaks down.

Life changes.

People move.

Phone numbers change.

Relationships change.

People die.

The person who made sense as your trusted contact at 60 may not be the right

person at 72.

Investor.gov recommends reviewing your trusted contact information

periodically, especially after significant life events.

I would make it part of an annual retirement checkup.

Once a year, review:

Beneficiaries.

Emergency contacts.

Power-of-attorney documents.

Passwords and account security.

And your trusted contact.

Five minutes each.

That is a pretty small investment of time for something that could matter

enormously later.

I have learned something while writing The O55 Report.

The biggest money problems after 55 are not always caused by bad investments.

Sometimes they come from things nobody prepared for.

A hospital stay.

A scam call.

A lost password.

A spouse dying.

A family member stepping in.

A financial institution trying to reach you and getting no answer.

We spend decades accumulating money.

Then sometimes we fail to build the simple protections around it.

Adding a trusted contact will not stop every scam.

It will not replace a will.

It will not replace power of attorney.

It will not replace good account security.

But it can add one more person to the safety net.

And sometimes one extra phone call is exactly what is needed.

So sometime today, ask yourself one question:

If my financial firm suddenly could not reach me, who would I want them to call?

If you immediately know the answer, make sure your brokerage firm knows it too.

Thank you for your continued dedication to the O55 Report. Your loyalty and

support mean a great deal to us, and we’re grateful that you keep coming back

to read each edition.

We created this newsletter with the over-55 community in mind, sharing useful

information, engaging stories, and topics we hope you’ll find relevant and

enjoyable. We hope you enjoy this edition, and thank you for being part of the

O55 Report community.

Warmly,

Mike Bridges