Why You Should Name a Trusted Contact

The Financial Industry Regulatory Authority (FINRA), the North American Securities Administrators Association and the U.S. Securities and Exchange Commission are working together to encourage investors to set up trusted contacts at their financial institutions.

FINRA requires members to ask each customer to appoint a trusted contact when they open or update an account. While naming a trusted contact isn’t required by law, it is an extra step you can take to help protect your wallet.

What Is a Trusted Contact?

A trusted contact is a person you appoint that the financial firm can reach out to if there is a problem with your account and the firm is unable to contact you.

The contact can be a trustworthy friend, family member, caregiver or attorney: anyone 18 years of age or older. You can have more than one trusted contact, and you can add or change a trusted contact at any time.

A trusted contact can’t access or make changes to your account and has no authority to act on your behalf. The role is very limited: The person you name is just a point of contact between you and your financial institution to protect you from fraud.

What if your account has been compromised in some way and you must act quickly to prevent financial loss or identity theft? If the financial institution is unable to reach you immediately, it can call your trusted contact so that that person can alert you to the potential problem.

How Can You Add a Trusted Contact?

You can add a trusted contact at any time by calling your financial institution or by logging into your account online.

You will need to know the person’s full name, phone number and physical address. Additional contact information, such as an email address, is also helpful.

If you open a new brokerage account, you’ll be asked if you would like to appoint a trusted contact.

And some brokerage firms are contacting their existing customers to ask if they would like to add a trusted contact.

Warning: Be aware that scammers are taking advantage of the trusted contact service. Never respond to an email or phone call from someone claiming to be a financial firm. Instead, call the firm directly or log in online to make changes to your account.

In What Situations Would a Financial Firm Reach Out to a Trusted Contact?

Here are a few scenarios in which a financial firm would get in touch with your trusted contact if you can’t be reached:

• Any uncharacteristic changes to your account such as large or repeated withdrawals or transfers
• Any sudden or unexpected changes to financial documents
• Any unusual actions that could signal problems with your health or well-being
• Any suspicion of financial exploitation

Be safe. Contact your financial institutions today to add a trusted contact to your account.

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