Financial Literacy Month highlights the importance of family talks on finance to safeguard loved ones
The Canadian Securities Administrators (CSA) has issued a call to Canadians to talk openly with family and loved ones about financial plans and goals, particularly in light of Financial Literacy Month’s theme, “Money on your Mind? Talk about it.”
The CSA highlights that these discussions can play a crucial role in preventing financial abuse.
Findings from the CSA's 2024 Investor Index reveal that 36 percent of Canadians are aware of at least one instance of senior financial abuse, marking a seven percent increase from 2020.
Common abuses cited include fraudulent investment offers, pressure to sign documents without proper understanding, exploitation of powers of attorney, and unauthorized cash withdrawals or investments.
The CSA reports that financial fraud inflicts not only financial harm but also emotional distress on victims, often causing loss of trust, increased stress, and feelings of anger and depression.
“Financial fraud and abuse can have devastating consequences that reach far beyond financial implications,” noted CSA Chair Stan Magidson, who also serves as Chair and CEO of the Alberta Securities Commission.
He emphasized that frank discussions about finances help families address these issues, building understanding and support to protect loved ones.
To support Canadians in safeguarding those they care about, the CSA provides the following recommendations:
- Engage in Open Conversations: Start conversations with open-ended questions to explore financial goals and possible concerns. Patience and an open mind can make these discussions positive and build trust.
- Recognize Investment Fraud Red Flags: Warn family members about common fraud indicators, such as unregistered individuals, high-pressure tactics, and promises of risk-free investments. Also, be cautious of unsolicited offers from social media, dating or chat apps, and text messages.
Tool: The CSA offers an investor alert system to notify subscribers of emerging threats.
- Watch for Signs of Financial Abuse: Remain attentive to unusual financial activity, unexplained debts, or changes in behaviour that may signal abuse.
Tool: The Financial Concern Checklist is available to help identify these signs.
- Consider Naming a Trusted Contact Person (TCP): Encourage family members to appoint a TCP who can communicate with their financial advisor if concerns about financial abuse arise.
Tools: The CSA offers resources like Is your advisor asking you for a Trusted Contact Person? and the You're my Trusted Contact Person form.
For further resources on discussing finances with loved ones and combating senior financial abuse, the CSA directs individuals to its online resources on financial abuse.
