The Senior Issues and Diminished Capacity Committee (Committee) of the North American Securities Administrators Association (NASAA), which usually focuses on issues relating to senior and vulnerable investors, recently published a research report (Report) examining the issues that arise when diminished capacity affects financial professionals. Although the Report does not include specific policy recommendations for regulators or detailed guidance, we nevertheless believe it is a useful resource for registered firms. The Report, which is based in part on the Committee’s consultations with firms, outlines the kinds of regulatory compliance and other challenges that firms face in dealing with individual representatives with cognitive impairment, describes the tools and kinds of information some firms have used to identify representatives experiencing diminished capacity, and the steps these firms have been taking to address situations where they identify representatives with diminished capacity. Not surprisingly, the Report notes that resources developed to help firms identify and engage with senior and vulnerable investors also may help firms identify and engage with employees experiencing similar difficulties.

AUM Law can help you review your policies, procedures and succession plan to determine whether enhancements are needed to address issues arising from diminished capacity among your staff. We can also help coordinate the retention of employment or other specialized counsel should the need arise.

July 31, 2020