States Enact Good Samaritan Broker Laws

The aging of the Greatest Generation and the Baby Boomers is highlighting the difficulties resulting from the cognitive decline of the investors of those generations. The inability of some of those senior investors to understand and process financial information is inconsistent with our self-reliant investing culture, which is largely based on disclosures in lengthy documents. Part of the burden is being placed on advisors due to the new best interest standards for broker-dealers and insurance brokers and agents. In addition, the SEC has heightened the expectations of the existing best interest standard for investment advisers. In addition to the burdens, there are also opportunities for advisors to help protect senior investors from financial abuse.

A recent article (and chart) on Faegre Drinker’s Broker-dealer Regulation & Litigation Insights discusses the protections given by states to “Good Samaritan” broker-dealers and their advisors who take steps to help when they believe that someone is taking advantage of a senior investor. The chart shows where each state is in legislating those protections.

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The views expressed in this article are the views of Fred Reish, and do not necessarily reflect the views of Faegre Drinker.