Who’s on Your Team? The Importance of a Trusted Contact Person
In an ever-evolving financial world, safeguarding your wealth and ensuring your peace of mind requires more than just a sound investment strategy—it demands a holistic approach to protecting your financial well-being. One important but often overlooked component of this approach is the Trusted Contact Person (TCP).
You may have heard the term before, but what exactly does it mean, and why is it important? Let’s dive in.
What is a Trusted Contact Person?
A Trusted Contact Person is someone you designate to act as a point of contact for your financial advisor or institution. This person doesn’t have access to your accounts or the authority to make decisions on your behalf. Instead, their role is to assist in specific situations where your financial security might be at risk or when ensuring your financial plan requires additional input.
A TCP acts as your advocate when concerns arise about:
- Financial exploitation or fraud.
- Unusual activity that might indicate diminished capacity.
- Difficulty reaching you due to outdated contact information or other life circumstances.
By providing your financial advisor with a TCP, you’re building a protective barrier around your financial assets.
Why is a Trusted Contact Person Important?
- Protecting Against Financial Fraud
Financial scams, particularly those targeting seniors, are on the rise. Fraudsters often use fear, urgency, or confusion to manipulate individuals into making costly mistakes. In such situations, a TCP can help verify unusual requests or behaviors, providing an additional layer of defense against exploitation.
- Supporting You During Life’s Transitions
As we navigate the complexities of life—aging, health challenges, or unexpected events—our ability to make clear financial decisions can sometimes be affected. A TCP ensures that someone who knows you and your priorities can offer guidance to your advisor, keeping your financial plan aligned with your goals.
- Ensuring Continuity
Imagine moving, traveling, or losing touch with your financial institution. A TCP helps maintain the connection, ensuring that important decisions and updates aren’t delayed.
- Regulatory and Ethical Safeguards
Financial institutions increasingly encourage or require the designation of a TCP as part of their duty to act in your best interest. This step not only protects your assets but also strengthens the trust between you and your financial advisor.
How to Choose a Trusted Contact Person
Selecting the right TCP is a personal decision. Here are a few factors to consider:
- Trust: Choose someone you deeply trust to act in your best interest.
- Availability: Ensure they are accessible and willing to assist if needed.
- Understanding: They should have a general awareness of your financial goals and priorities.
- Relationship: A close family member, such as an adult child or sibling, is often a good choice. Alternatively, a trusted friend or professional advisor can fulfill this role.
It’s important to note that the TCP’s role is limited—they cannot make financial decisions or transactions unless they hold a separate legal designation, such as a Power of Attorney.
How to Designate a Trusted Contact Person
Adding a TCP to your account is straightforward:
- Reach out to your financial advisor.
- Provide the TCP’s name and contact information.
- Review and sign any necessary forms.
Remember, naming a TCP is completely optional, but it’s a highly recommended step in protecting your financial security.
What a Trusted Contact Person Can—and Cannot—Do
What They Can Do:
- Be contacted if there are concerns about your financial well-being.
- Confirm information about your whereabouts or health.
- Provide context if unusual account activity arises.
What They Cannot Do:
- Access your accounts.
- Make financial decisions or transactions.
- Direct your financial advisor on how to manage your investments.
Final Thoughts: Peace of Mind Starts Here
A Trusted Contact Person is like an extra seatbelt in your financial plan—something you hope you’ll never need but are grateful to have in place when the unexpected happens. By naming a TCP, you’re taking a proactive step to protect your wealth, preserve your independence, and ensure your financial plan continues to work for you no matter what life brings.
If you’re ready to designate a Trusted Contact Person or have questions about how it works, we’re here to help. Let’s work together to strengthen your financial security.
