Compliance

Elder financial abuse reporting requirements by state

Reporting suspected elder financial exploitation is a federal and state matter. The Senior Safe Act provides federal immunity for reporting, but state laws control what you must report, to whom, and when. This guide summarizes the landscape and provides starting points for state-specific compliance.

Mandatory vs permissive reporting

States divide roughly into three buckets when it comes to financial professionals and elder abuse reporting:

Mandatory reporting states (financial professionals required). States including California, Colorado, Florida, Maryland, and many others require financial professionals who reasonably suspect elder financial exploitation to report it to Adult Protective Services (APS) or law enforcement. Failure to report can result in penalties.

Mandatory reporting states (general — covers professionals). Many states have broad mandatory reporting laws covering all professionals or all adults who suspect elder abuse, which captures financial advisors implicitly. Examples: New Hampshire, Indiana, Wyoming.

Permissive reporting states. A smaller number of states make reporting permissive (you can report without liability but aren't required to). Examples include some states that focus mandatory requirements on healthcare professionals only.

Key takeaway: assume mandatory reporting unless you've specifically confirmed otherwise for your state.

The reasonable suspicion standard

Most states use a 'reasonable suspicion' or 'reasonable cause to believe' standard — not 'proof' or 'certainty.' This is intentionally low to encourage reporting.

What's reasonable suspicion for an advisor:

— Unusual transactions inconsistent with client's normal pattern.

— New 'helper,' romantic partner, or caregiver directing financial decisions.

— Client appears confused or distressed about transactions.

— Wires or large withdrawals to unfamiliar parties.

— Power of attorney suddenly invoked under unclear circumstances.

You do not need to be certain. You need to have specific, articulable facts that lead a reasonable person to suspect exploitation.

Where to report

Three categories of reporting recipients exist in most states:

1. Adult Protective Services (APS). The state agency responsible for investigating reports of elder and dependent adult abuse. Most states have a hotline; many accept online reports. APS is the primary recipient in mandatory reporting frameworks.

2. Law enforcement. Local police, sheriff, or in many states a specialized financial crimes / elder abuse unit. Required when the suspected exploitation involves a crime in progress or imminent threat.

3. State securities regulator. If the suspected exploitation involves securities (e.g., the perpetrator is a former advisor, or it involves a fraudulent investment), the state securities administrator should be notified. Find via nasaa.org.

Best practice: notify all three when in doubt. The Senior Safe Act provides immunity for reports to any of these.

Recommended state-specific resources

Each state's APS contact information is centralized at the National Adult Protective Services Association: napsa-now.org. They maintain an updated state-by-state hotline directory.

For state securities administrators, the North American Securities Administrators Association (NASAA) maintains a directory: nasaa.org. NASAA also coordinates the Senior Safe Initiative and has model rules many states have adopted.

Specific state guides every advisor should have bookmarked:

— National APS hotline directory (napsa-now.org)

— Your state securities regulator's senior protection page

— Your state's specific mandatory reporting statute (search '[State] elder financial abuse mandatory reporting')

— Your state AG's consumer protection office

Reporting documentation

Before you make a report, prepare:

— Client identification (name, DOB, contact info).

— Description of suspected exploitation (specific facts, not just conclusions).

— Timeline of events.

— Identification of suspected perpetrator (if known).

— Documentation of any transactions involved.

— Any holds placed under FINRA Rule 2165.

— Whether Trusted Contact Person has been notified.

Keep a copy of your report submission. APS and law enforcement reports are often handled by case workers who may follow up — having your documentation ready accelerates the response.

Coordination across federal, state, and FINRA

When all three layers apply (federal Senior Safe Act, state mandatory reporting, FINRA Rule 2165), here's how they fit together:

FINRA Rule 2165 gives you the operational tool — temporary hold on disbursement, internal review, TCP notification.

State mandatory reporting requires you to report the underlying suspicion to APS / law enforcement.

Senior Safe Act provides federal immunity for the disclosure made under state reporting requirements.

Sequence in practice: (1) identify red flags → (2) escalate internally → (3) place Rule 2165 hold if applicable → (4) notify TCP → (5) file state report → (6) document everything → (7) continue internal review.

Doing one without the others is incomplete compliance.

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