12 red flags your client is being scammed
Transaction patterns
1. Sudden large or unusual disbursements. A client who has historically maintained a steady income/expense pattern suddenly requests large wires, withdrawals, or transfers. Especially flag: international wires, wires to recently-added beneficiaries, or transfers in patterns that mirror known scam scripts (e.g., decreasing amounts to multiple destinations).
2. Multiple smaller withdrawals just below reporting thresholds. $9,800 withdrawals or wires structured to avoid the $10,000 CTR threshold suggest someone is coaching the client.
3. Closing CDs, annuities, or other locked products early to access cash. Especially when accepting significant surrender charges. Healthy financial decisions rarely look like this.
4. Sudden interest in 'investment opportunities' the advisor hasn't discussed. Crypto, forex, real estate ventures introduced by someone the client met online. The pig butchering signature.
Behavioral changes
5. Client becomes evasive about transactions. Previously open clients now refuse to explain why they want certain transactions. Common scam scripting includes 'don't tell anyone, including your financial advisor.'
6. Pressure or urgency from client around transactions. Wanting things done immediately, refusing to wait for the normal verification process, becoming agitated when slowed down. Real urgency around personal finance is rare.
7. Client appears confused about transactions or accounts. Not remembering recent activity, asking what an account is for, not recognizing transactions they authorized days earlier. Could be diminished capacity, could be the early stage of being coached through unfamiliar instructions.
8. Sudden secretive behavior or shame. A previously trusting client now seems guarded, or expresses unusual shame around money topics. Scam victims often hide ongoing victimization out of embarrassment.
Changes in the people around them
9. New 'helper,' caregiver, romantic partner, or friend involved in financial decisions. Especially someone the family doesn't know well or who has appeared recently. Romance scams and 'sweetheart scams' often graduate to in-person involvement.
10. Adult child or family member calls expressing concern. Take this seriously even when the client denies it. Family members often see the patterns from a different angle and earlier.
11. Suddenly granted power of attorney to a new person. Especially if the person is recent in the client's life, or replaced a long-standing POA. Sometimes legitimate; often a red flag.
12. Client mentions a new relationship online they 'haven't met yet.' Almost universally a romance scam in progress. Especially flag: 'doctor working abroad,' 'soldier deployed,' 'businessman traveling,' 'wealthy widower.'
What to do — the escalation playbook
When you see one or more of these red flags:
Step 1: Document. In the CRM, contemporaneously: what you observed, when, what was said. Specific, not conclusions.
Step 2: Slow the transaction. If a disbursement or trade is in progress, use whatever tools your firm allows. For broker-dealers, FINRA Rule 2165 explicitly authorizes a temporary hold. For RIAs, consult your custodian — most have similar procedures.
Step 3: Talk to the client. Privately, calmly. Use open-ended questions: 'Tell me more about how you decided on this.' Listen for scripted responses, evasion, or shame.
Step 4: Notify the Trusted Contact Person. If a TCP is on file, this is exactly the situation FINRA Rule 4512 contemplates.
Step 5: Escalate internally. To your compliance officer or senior protection lead. Don't carry this alone.
Step 6: Report if warranted. State APS, law enforcement, securities regulator — depending on your state's mandatory reporting rules and the severity. The Senior Safe Act provides federal immunity.
The hardest part: when the client insists they're fine
Scam victims often resist intervention. Romance scam victims in particular are emotionally invested and may experience interventions as betrayal by family and advisors.
Some things that help:
— Don't accuse the scammer. Make it about caring for the client.
— Offer to make a single phone call together: 'Let's just call the bank's fraud line together to confirm everything's okay.'
— Use neutral evidence: news articles about specific scam scripts the client describes.
— Bring in family if appropriate (with TCP authority).
— Sometimes you have to lose the trade or the disbursement to keep the client. That's the right outcome.
Some you cannot save. The job is to do everything reasonable, document it, and live with the difficulty of human autonomy.
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