Unfortunately, relying on family members, caregivers, or friends to help us with financial matters can expose us to a higher risk of financial exploitation and fraud at a time when we may be especially vulnerable. To mitigate this risk and protect ourselves from potential financial harm, it is crucial to consider naming a Trusted Contact Person (TCP).
Defining the Trusted Contact Person
If you have investments with a financial institution or investment firm, your advisor is obligated to ask you about designating a Trusted Contact Person (TCP). While the decision to name a TCP is optional, it’s wise to consider selecting someone for this important role sooner rather than later. Granting your advisor permission to contact your TCP is similar to providing them with an emergency contact. Depending on the consent you provide, your advisor may contact your TCP in the following circumstances:
- Failure to reach you after repeated attempts, which is an unusual occurrence.
- Suspicions of financial mistreatment or exploitation.
- Concerns regarding your mental capacity and its impact on your ability to make sound financial decisions.
- The need for confirmation of your legal representative, such as a power of attorney, executor, or trustee.
For instance, your advisor might contact your TCP if they are unable to reach you due to an extended vacation that you forgot to inform them about. In more sensitive situations, your advisor may reach out to your TCP to validate a request that appears out of character for you.
Roles and Limitations of a Trusted Contact Person
The primary role of a TCP is to help safeguard your financial assets by providing an additional resource for your advisor to make decisions that prioritize the protection of your account. Your advisor may contact your TCP to discuss the following:
- Concerns regarding your mental capacity and its potential impact on your financial decision-making abilities.
- Signs of financial mistreatment or abuse that your advisor has noticed.
- Concerns that you are being scammed
It’s important to note that a TCP differs from a power of attorney. A TCP does not have the authority to manage your finances or make financial decisions on your behalf.
Selecting a Trusted Contact Person
When choosing a TCP, consider selecting a mature family member or friend whom you trust implicitly. This individual should be capable of handling difficult conversations about your personal situation, should they arise. Consider someone who will prioritize your best interests, possesses knowledge of your support network, and is typically not involved in your financial decisions. Additionally, it is essential to ensure that the person you select is willing to assume the role and is comfortable communicating with your advisor.
While assigning a TCP to your account is optional, it can offer invaluable peace of mind knowing that your advisor can rely on someone you trust to help safeguard your financial assets should an emergency arise.
To learn more about designating a TCP for your accounts, we encourage you to visit CheckFirst.ca or consult with your registered advisor.
