As working from home continues during the pandemic, advisors may be challenged to keep in close contact with seniors as well as maintain the integrity of client data overall.
Such challenges were noted during a legal panel presentation this week at the Federation of Mutual Fund Dealers’ 2021 virtual conference.
It’s critical for advisors to maintain close contact with clients throughout the Covid pandemic, particularly with seniors, said panellist Zachary Pringle, an associate at Babin Bessner Spry LLP in Toronto.
“Client circumstances can change very quickly, and advisors need to know about these changes,” he said.
Cognitive and health changes can be rapid for seniors relative to younger clients, and the lack of face-to-face meetings makes recognizing any decline a challenge, Pringle said. He suggested advisors make regular phone or video calls to seniors, and that they maintain contemporaneous notes about the calls.
“If an advisor hasn’t seen a senior client since the beginning of Covid, it is incumbent on them to schedule more frequent phone calls to satisfy themselves that their senior clients remain capable of managing their own financial affairs,” he said.
Documentation should be maintained to provide evidence that the client is capable and isn’t subject to financial abuse or fraud, Pringle added, saying that detailed documentation in general is key for protecting advisors.
“In regulatory and civil litigation matters, a detailed paper trail with contemporaneous client notes can make all the difference,” Pringle said.
Text messages to clients are part of the paper trail, and Pringle said software should be used to save texts. He also suggested that dealers audit for notes “fairly frequently.”
Seniors were again highlighted in the context of e-signatures. If a senior doesn’t typically communicate with their advisor by email and isn’t tech-savvy but suddenly begins returning documents with an e-signature, that should raise red flags, Pringle said.
The need for advisors to keep client data private as they work from home office was also discussed.
Pringle described the case of an advisor who worked from home at the kitchen table, making phone calls and having Zoom meetings within earshot of their retired spouse. The advisor’s spouse then spoke to one of the clients, who was a family friend, outside the home and referred to the client’s private details.
The client left the advisor shortly thereafter, and a regulatory audit of the advisor ensued, Pringle said, noting that the advisor failed the audit and was investigated for privacy breaches.
“Dealers must ensure that their advisors have strict adherence to maintaining client privacy, just like how they would be in the office,” Pringle said.
For example, advisors at home should have office space separate from other family members, ideally with a door with a lock, he added. No one should be able to hear client conversations, even just the advisor’s side.
Also in the home office, advisors “absolutely need to maintain” a cabinet with a lock for confidential client documents, Pringle said. Plus, advisors need shredders for stray notes they write that won’t be included in official documentation.
Electronic client data must also be secured, with advisors working only within internal remote workstations, and turning off computers when not in use.
“It’s not sufficient to leave the home office with a computer monitor open with client information, even just to go make dinner,” Pringle said. “And of course the computer needs to be password-protected.”