Key Determinants of Naming a “Trusted Contact” for U.S. Brokerage Accounts

Using data from the 2018 National Financial Capabilities Study (NFCS) Investor’s Survey, this research investigated the determinants of naming a “trusted contact.” In early 2018, FINRA enacted Rule 4512 that requires brokerage firms to ask clients to provide a trusted contact if the firm has reason to believe the account may be exposed to financial exploitation or fraud. Based on a sample of 1,520 respondents, a positive relationship was found between obtaining investment information from stockbrokers, financial advisors, industry regulators, and employers, subjective knowledge, and a preference for receiving disclosures through in-person meetings and naming a trusted contact. Obtaining investment information from the media, objective knowledge, and preferring to receiving disclosures electronically were negatively related