On May 18, 2021, South Carolina enacted new legislation intended to help investment advisers and broker-dealers protect clients who are
vulnerable adults (such as seniors with diminished capacity) from financial exploitation. Similar to financial exploitation laws adopted by other states, South Carolina’s new law permits state registered investment advisers and broker-dealers to delay disbursements and transactions under specified, limited circumstances for a vulnerable client who is an “eligible adult” as defined by the statute. In addition, a registered investment adviser firm may contact other third parties previously designated by the vulnerable client, such as a trusted emergency contact, regarding the suspected financial exploitation. Firms are also permitted to report suspected financial exploitation to South Carolina’s Adult Protective Services and Securities Division on a voluntary basis. In the event that an investment adviser firm delays a transaction or disbursement, reporting to the specified agencies is mandatory. Click here to read South Carolina’s new financial exploitation law.
