All firms and their financial advisors in Canada are required to ask each of their clients to name a Trusted Contact Person. Sharing the name of someone you consider to be a trusted contact can help protect your accounts and give you peace of mind.
On this page you’ll find
Who is a Trusted Contact Person?
Your investment firm is required to ask you about adding a Trusted Contact Person to your account. You’ll be encouraged to choose someone you trust and who knows you well to be your Trusted Contact Person.
Your advisor will ask you to provide contact details so they can reach your Trusted Contact Person. You will also be asked to provide written consent for the advisor to reach out to the Trusted Contact Person in specified circumstances. Your financial advisor may be well positioned to notice warning signs if you are not acting like yourself or if they suspect you’re being financially exploitation.
The Trusted Contact Person initiative is part of regulatory measures to support advisors in their efforts to help protect investors and their financial interests.
Canadian seniors are increasingly called upon to make complex financial decisions, with higher stakes, later in life than ever before. For many, health or cognitive changes that can occur with age, may affect their ability to make these decisions. This can make seniors more susceptible to financial exploitation and fraud.
The OSC’s Profiles of Retirement survey found many Canadians are not preparing financially for the possibility of physical or cognitive decline. 42% of pre-retirees and 48% of retirees had an unexpected health-related event occur that significantly impacted their ability to prepare for the future — the most common event being a physical health limitation. But just like having an emergency fund, there are things you can do to be ready in case your health circumstances change. Naming a Trusted Contact Person is a step you can take to be prepared for whatever the future may bring.
When would your advisor call your Trusted Contact Person?
Your advisor can only contact your Trusted Contact Person based on the written consent you give to the advisor. Generally speaking, the consent you will be asked to provide will include the following circumstances:
- Where your advisor suspects you are being financially exploited.
- Where your advisor has concerns about your mental capacity as it relates to your ability to make financial decisions.
- To confirm your contact information if your advisor is unable to contact you after repeated attempts and where failure to contact you would be unusual.
- To confirm the name and contact information of a legal guardian, executor, trustee, an attorney under a power of attorney (POA) or any other legal representative.
Depending on your written authorization and circumstances, an advisor may contact your Trusted Contact Person to discuss:
- Your current whereabouts if they haven’t been able to contact you directly.
- Concerns that suggest you may be a target of a fraud or scam.
- Concerns about changes to your mental capacity to make financial decisions.
- Signs of suspected financial mistreatment observed in dealings with you or with your power of attorney.
Your Trusted Contact Person is a resource that may assist your advisor to help protect your financial well-being. Your Trusted Contact Person is simply someone who provides another layer of protection to your accounts. They can’t make transactions or have access to your account. They can’t make decisions on your behalf. And they are not your legal representative or guardian.
Who should you name as your Trusted Contact Person?
The decision to name a Trusted Contact Person is yours. You don’t have to name one, but it is strongly recommended. Consider choosing someone in your life who:
- You trust.
- You communicate with on a regular basis who would notice changes in your life.
- Would be comfortable speaking with your advisor about your personal situation.
- Is not involved in your financial decision-making process.
Basically, you want to pick someone who knows you well. Your Trusted Contact Person should not be your financial advisor.
It’s a good idea to tell your Trusted Contact Person that you’ve named them. This may help your Trusted Contact Person feel comfortable talking with your financial advisor if they’re contacted and to not be surprised by the call. You could also use the opportunity to share your wishes and expectations of the Trusted Contact Person, should issues arise and they are asked to help.
It always makes sense to be prepared, for whatever might come your way. Naming a Trusted Contact Person is optional. But it can reduce your stress, knowing your financial advisor has extra help to protect you — and your account.
How is this different than a power of attorney?
Unlike a power of attorney, a Trusted Contact Person does not have authority to make decisions on your account. Instead, your Trusted Contact Person can act as a resource for your advisor if they’re having a hard time getting in touch with you. Or, if your advisor suspects that you’re being financially exploited, or has concerns about your ability to make financial decisions.
With a power of attorney, you can authorize another person to act on your behalf to carry out specific actions, such as paying your expenses, or to manage your finances generally. A Trusted Contact Person does not have authority over your accounts and therefore is not permitted to direct trades, have access to your accounts or otherwise make financial decisions on your behalf.
While you can choose to appoint your power of attorney as your Trusted Contact Person, it is recommended that you choose someone who is not involved in your financial decision-making process, to add that second layer of protection for your account.
What to know if you are named as a Trusted Contact Person
You should be aware that the person’s firm may contact you to discuss:
- Current contact information of their client
- Any changes are aware of regarding their health that may impact their ability to make financial decisions
- Circumstances surrounding suspected financial exploitation, such as a suspected fraud or scam.
- Signs of suspected financial mistreatment.
Read this brochure to learn more about appointing a Trusted Contact Person.
Summary
A Trusted Contact Person is someone who essentially serves as your emergency contact for your financial advisor. Your advisor will ask you to provide:
- Contact details so they can reach your Trusted Contact Person.
- Written consent for the advisor to reach out to the Trusted Contact Person in specified circumstances.
- The Trusted Contact Person initiative is part of regulatory measures to support advisors in their efforts to help protect investors and their financial interests.
- Unlike a power of attorney, a Trusted Contact Person does not have authority to make decisions on your account.
