Financial literacy and naming a “trusted contact” for U.S. brokerage accounts

Matthew Sommer () and HanNa Lim
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Matthew Sommer: Janus Henderson Investors
HanNa Lim: Kansas State University

Journal of Financial Services Marketing, 2024, vol. 29, issue 2, No 26, 582-589

Abstract: Abstract Using data from the 2021 National Financial Capability Study (NFCS), this research investigated the relationship between financial literacy and naming a “trusted contact.” In early 2018, FINRA enacted Rule 4512 that requires brokerage firms to make a reasonable effort to obtain a trusted contact for all retail account owners. A trusted contact is someone who can be contacted in limited circumstances to discuss the welfare of the account owner. Based on a sample of 2046 respondents, approximately 40% reported naming a trusted contact. A logistic regression analysis indicated a negative relationship between objective knowledge and naming a trusted contact, while a positive relationship was found with subjective knowledge.

Keywords: Trusted contact; FINRA Rule 4512; Financial exploitation; Elder abuse; Cognitive decline (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s41264-023-00227-7

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