Submitted by nsscadmin on
Two weeks ago, a blog post talked about trusted contact persons (TCP). The same amendments that allowed advisers to ask for and collect TCP information also allowed an adviser to place a temporary hold on a transaction in certain circumstances.
Why would an adviser need to place a temporary hold?
The amendments give an adviser the ability to place a temporary hold on a transaction if they believe their client is being financially exploited, or if the client appears to lack the mental capacity to make financial decisions.
For instance, if an adviser were to find out a client was being exploited by a loved one who was stealing from their retirement fund, they could place a temporary hold on a sale of funds from their account to determine exactly what is happening and if their client is being abused.
A financial adviser may have had a long relationship with an older client and may be able to spot signs of financial exploitation or abuse, or possibly spot reduced capacity in a client. If an adviser notices a decline in capacity, they can place a temporary hold on a transaction that may not be in their client’s best interest to avoid any undue harm or hardship.
A temporary hold does not apply to the client’s entire account, only to the suspect transaction. Transactions that are unrelated to suspected financial exploitation or an apparent lack of mental capacity would not be held. For example, if a temporary hold were placed on a sale of securities, automated bill payments from the client’s account would not be suspended or held.
For more information on the placing of temporary holds please see the amendments to National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).