FPA of MN Newsletter – August 2017

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Help when it matters most

Who do you turn to when you need help? A family member, your spouse, a trusted friend or mentor? What would you do if they weren’t available or able to help?

For too many of our neighbors, finding the help they need when a financial emergency happens can be difficult and stressful, but it doesn’t have to be.

FPA MN’s Pro Bono Committee believes that everyone deserves quality financial advice regardless of their financial means or background. We also believe that our members are in a unique position to be able to help connect others with information and resources that can help empower them to make positive strides toward improving their financial well-being.

In furtherance of that vision, the Pro Bono Committee hosted a Community Resource workshop in June to provide our members with connections to local not-for-profit organizations they can use when working with their own clients or when responding for requests for pro bono advice.

Melanie Hardie moderated a panel of speakers representing FamilyMeans, Consumer Credit of Minnesota, and Prepare + Prosper, who shared information about the services they provide and how planners can more effectively leverage their expertise.

The panelists fielded questions from the audience about helping clients create and adhere to a budget, tax preparation and financial coaching for low-income individuals, student loan debt repayment options, debt management, bankruptcy, and facilitating action when a situation seems overwhelming.

Educational materials and lists of community resources were provided to participants, as well as pointers for helping successfully connect individuals with organizations that can help.

The next Pro Bono Workshop will provide "Tools for Working with Neighbors in Need," and is scheduled immediately following the chapter meeting on September 19th. One hour of CE credit will be available for this session.

Are you able to help? Each month our chapter receives multiple requests for one-on-one pro bono consultations from community members in need. Many of these requests come from senior citizens who don’t know where else to turn.

If you’re a CERTIFIED FINANCIAL PLANNER™ professional and have 15-20 minutes for a phone call, we need your help. Please email volunteers@fpamn.org to receive email notifications about these types of requests in the future, and thank you!

If we all just did ONE THING, imagine the impact we can have on our community!

Want more information? There are educational and community resources available for planners and consumers via both the FPA MN and Foundation for Financial Planning via the following links:

Recap: 2017 NexGen Gathering from FPA of MN Scholarship Winner Kathleen Broich

I recently had the pleasure of attending the 2017 NexGen Gathering conference after being selected for the FPA of Minnesota NexGen scholarship. I was especially interested in attending this event because I am a career changer who has only been in the profession for a year. One of the hardest parts of my career change has been leaving behind my professional network and I hoped the Gathering could be one way I could start making new connections. To my surprise, the Gathering provided that, plus so much more.

The reason people go back to the Gathering year after year is because it is different than any other conference. What makes it unique is that the attendees drive the topics and co-lead conversations. This is not a conference where you are “talked to”, but rather a gathering of people who collectively determine the course of the weekend. As someone who describes themselves as Type A and tends to want things very organized, this approach both fascinated and terrified me!

My apprehensions with this unique approach were quickly dissolved after participating in what Gathering refers to as “Opening Circle.” During this time, attendees are given the opportunity to share with the larger group what their intention for the conference is and what they hope to get out of it. After about 20 minutes I mustered up the courage to grab the microphone and explained that I was a recent career changer hoping to meet others just starting out in the profession. To my surprise, over 15 people enthusiastically shot their hands into the air exclaiming they were career changers too! I’d found my people!

From that Opening Circle, dozens of topics were identified and over the next 24 hours, I participated in extremely meaningful conversations. One such discussion explored diversity in the field of financial planning. I was so moved by the honesty and vulnerability shared in that conversation and it reignited my passion for increasing the number of women in the profession.

I arrived at Gathering not knowing any of the other attendees and I left with more friends and connections than can be counted. The openness and willingness by everyone to support and help others was inspiring and, for me personally, very much needed. I no longer feel like I’m a career changer out on an island trying to “fake it until I make it”. This experience allowed me to grow as a person, meet other people in a similar situation, and learn from others who are farther down the path.

I would strongly encourage attending the Gathering if you are new to financial planning or perhaps a more seasoned veteran looking to be reinvigorated. The thoughtful and thought-provoking conversation, not to mention the friendships formed, is well worth your time. I thank FPA of Minnesota NexGen for selecting me as the 2017 scholarship recipient.

New FINRA Rules Address Elder Exploitation

In March, FINRA published Regulatory Notice 17-11 Financial Exploitation of Seniors announcing that the SEC had approved FINRA’s proposals for addressing financial exploitation of seniors. Regulatory Notice 17-11 covers the new FINRA rule 2165 (Financial Exploitation of Specified Adults) as well as amendments to FINRA Rule 4512 (Customer Account Information). Both will be effective February 5, 2018.

FINRA Rule 2165 Financial Exploitation of Specified Adults follows NASAA guidelines that have been discussed in this Committee’s previous newsletter articles. The rule permits member firms to temporarily stop a disbursement of funds when there are concerns that a client, who qualifies under the rule as a specified adult, is the victim of financial exploitation. The rule creates a safe haven from several FINRA rules that had previously forced the firm to make the disbursement in a timely manner despite those concerns. The firm has 15 days to investigate the matter and if it has reasonable cause to believe that a crime is being committed, it can delay the disbursement for an additional 10 days.

The rule describes a “specified adult” as someone over the age of 65 or someone over the age of 18 which the firm reasonably believes cannot protect their own best interest due to mental or physical impairment.

The rule also requires that the member firm notify all parties authorized to transact business on the account of the hold along with the reason. The firm can refrain from notifying any authorized party that is suspected of perpetrating the exploitation.

Underpinning Rule 2165 is the assumption that there will be someone to notify who can assist in stopping the exploitation. The approved amendments to FINRA Rule 4512 address this by requiring member firms to make a reasonable effort to obtain the name and contact information for a “trusted contact person”. This is supposed to occur when a new account is opened or when personal account information is being updated. By requiring the member firm to disclose to the client that FINRA requires them to ask for the information, the amendment seeks to alleviate any discomfort an advisor might have in asking for trusted contact person information.

Regulatory Notice 17-11 notes that there are several situations where it could see an advisor reaching out to the trusted contact person beyond concerns of elder exploitation. It lists being unable to reach a client because they may be hospitalized or if there is concerns that the client has started to suffer from diminished mental capacity.

These are good first steps but the whole industry needs to develop procedures for an assortment of aging issues. For one thing, Rule 2165 does not cover trades. What do you do if your conservative client calls and leaves trade orders with your staff that are completely contrary to the client’s current allocation? Call your custodian or broker and ask them what their procedure would be if you were concerned that a client is suffering diminished capacity. The answer I got was that they take it on a case by case basis. While FINRA’s rules are a good first step, there are still a lot of issues surrounding aging clients that the entire financial industry needs to stop taking on a case by case basis.

SYMPOSIUM BREAKOUT - October 17 - Michael Marben & Martin Fleischhacker - Regulatory Update for State Registered Investment Advisors

Register Today: www.FPAMNSypmosium.org
Regulatory Update for State Registered Investment Advisors
Presentation Scheduled for Monday, October 17, 1:50-2:40 pm
Anticipated CE: 1 MN insurance, 1 CLE Standard & 1 CIMA
Approved CE: 1 CFP, 1 WI insurance, 1 NASBA/CPE

Please join Michael Marben and Martin Fleischhacker from the Minnesota Department of Commerce on October 17, 2017–1:50-2:40 pm for their presentation with the Financial Planning Association of Minnesota Symposium 2017.

Fleischhacker, Assistant Commissioner of the Enforcement at Commerce, will discuss the Department’s mission and involvement with both consumers and businesses as an important resource, as well as the Enforcement Division’s duties. He will also outline Commerce’s clients in the Department’s 20+ regulated industries.

Marben, Director of Special Investigations of the Commerce Fraud Bureau, will explain the Commerce Fraud Bureau’s role and mission, “to protect Minnesotans from fraud by conducting aggressive criminal investigations in the pursuit of justice.” He will discuss the economic impact of Fraud Bureau cases, including what and who are being funded from fraudulent successes. Marben will also review specific cases of fraud and trending, fraudulent crimes.

There will be an opportunity to ask questions after the presentation.

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