To help protect more vulnerable clients from financial abuse and exploitation, the Canadian securities regulators recently introduced the Trusted Contact Person (TCP) standard.
What is a Trusted Contact Person?
A TCP is someone you authorize your Scotia Wealth Management relationship manager to contact if they suspect you’re being financially exploited or if they’re concerned about your ability to make sound financial decisions because of physical or mental incapacity.
Who can be a TCP?
Your TCP can be anyone who is at least 18 years old and typically is not involved in your financial decision-making. Ideally, your TCP will be knowledgeable about your financial circumstances and overall personal situation, plus they must be trusted to keep your best interests in mind. Often the TCP is a significant other, family member or close friend, but it may also be a caregiver or other professional like an accountant or lawyer who can advocate on your behalf.
What is the role of a TCP?
A TCP is someone your Scotia Wealth Management relationship manager can turn to if they suspect you may be the victim of financial exploitation and unable to make sound financial decisions. The TCP will apprise your relationship manager of your current state of mind and whether you might be vulnerable to financial exploitation because of incapacity or other reasons.
The TCP may also be asked to provide details such as your current contact information – it may have changed but was not updated at your advisor’s firm – or your Power of Attorney’s contact information.
Who should appoint a TCP?
Seniors should name a TCP, as they are typically more vulnerable to financial abuse and more likely to experience age-related health issues like dementia or other illnesses. Regardless of your age, we recommend appointing a TCP to provide an additional layer of protection for your finances.
When do I appoint a TCP?
You will be prompted to name a TCP when opening an investment account with your Scotia Wealth Management relationship manager. Should your circumstances change, and you need to amend your TCP, you may do so anytime by completing a new form. While it is not mandatory to name a TCP on your account, we highly recommend doing so for an added level of protection.
How is a TCP different from Power of Attorney?
Unlike a TCP, someone who has Power of Attorney (POA) is legally authorized to make financial and/or healthcare decisions for you. It’s possible for someone with POA to make poor decisions or even abuse their power, which is another reason to have a TCP who can raise concerns with your investment advisor. Your TCP is not permitted to undertake or approve trading activity in your investment account, nor will an investment advisor grant your TCP access to your account or account information.
How is a TCP different from trading authority?
With trading authority, you’re authorizing someone to make decisions for you within your investment account. As mentioned, your TCP is not permitted to undertake or approve trading activity in your investment account, nor will an investment advisor grant your TCP access to your account.
For more information about whether you should consider naming a Trusted Contact Person, please contact our office.
source https://richarddri.ca/protect-your-finances-with-a-trusted-contact-person/
Dri Financial Group 