What Is the “One Trusted Person” Rule?
The idea is simple. Your parent designates one person — just one — who a financial institution can contact if something looks off. That person isn’t a co-owner of the account. They can’t move money or make decisions. They’re simply a named contact the bank or brokerage can call when they’re concerned.
FINRA formalized this concept in 2018 for brokerage accounts. Many banks have quietly adopted a similar practice. The CFPB also recommends naming a trusted contact as one of the most practical steps older adults can take to protect themselves from financial exploitation.
It costs nothing to set up. It doesn’t reduce your parent’s independence in any way. And it can be the difference between a scam being stopped and a scam succeeding.
Why One Person, Not Several?
It might seem like more contacts means more protection. In practice, it tends to create confusion. If a bank reaches out to three people simultaneously, the response gets muddled. One person assumes another is handling it. Important time gets lost.
A single trusted contact also carries more weight. That person knows they’re the one who will get the call. They take the role seriously. And your parent has made a clear, deliberate choice — which matters both emotionally and legally if questions ever arise later.
Who Should the Trusted Person Be?
This is the question worth sitting with. The trusted contact doesn’t have to be the same person who has power of attorney. It doesn’t have to be the oldest child or the one who lives closest. It should be whoever your parent genuinely trusts and who is reliably reachable.
A few things to look for in a trusted contact:
- Available. They answer their phone. They respond to messages quickly.
- Calm under pressure. They won’t panic or overreact if a bank calls with a concern.
- Financially literate enough. They don’t need to be an expert, but they should understand what a wire transfer is and why it might be a red flag.
- Not a source of conflict. If there’s family tension around money, choose someone outside that dynamic.
Sometimes the right person is an adult child. Sometimes it’s a close family friend, a neighbor, or a sibling. Let your parent lead that decision. Pushing a choice on them can make the whole conversation feel like a takeover rather than a precaution.
How Do You Actually Set It Up?
Setting up a trusted contact is straightforward for most accounts.
- Find the right form. Ask your parent’s bank or brokerage for their trusted contact designation form. Many now offer this online through the account portal.
- Fill in the contact’s details. This typically includes a name, phone number, email address, and relationship to the account holder.
- Sign and submit. The account holder (your parent) signs the form. The trusted contact doesn’t need to sign anything, though it’s courteous to let them know they’ve been named.
- Review it periodically. Life changes. The trusted contact should be reviewed every year or two, or after any major life event like a divorce, move, or death in the family.
Some parents have multiple accounts at different institutions. Each one may require its own form. It’s worth going through them one by one rather than assuming one designation covers everything.
What Happens When the Bank Actually Calls?
If a bank or brokerage spots something unusual — a large withdrawal, a wire to an unfamiliar account, repeated contact from a third party pressuring your parent — they may reach out to the trusted contact. That call isn’t an alarm. It’s a check-in.
The trusted contact’s job is to listen, provide context if they have it, and help the institution decide whether to proceed or pause the transaction. They can’t reverse a transaction or freeze the account. But they can flag that something seems wrong, and that signal is often enough for the institution to slow things down.
This is especially valuable in cases of financial elder abuse, where the pressure to act quickly is often part of the scam itself.
How to Bring This Up With Your Parent
Many adult children worry this conversation will feel intrusive. It doesn’t have to. You’re not suggesting your parent can’t manage their own finances. You’re suggesting a simple safeguard that banks themselves recommend.
A low-pressure way to start: “I was reading about something banks are doing now where you can name one person they’d call if something ever looked unusual on your account. It takes five minutes to set up. Would you want to do that?”
For more on starting these conversations without friction, see our post on talking to parents about finances.
Ask Felix can help you stay gently in the loop on your parent’s financial accounts — with their permission — so you’re never the last to know if something looks wrong.
Frequently Asked Questions
Q: Can the trusted contact access my parent’s account?
No. A trusted contact has no account access, no ability to make transactions, and no legal authority over the account. They are only a point of contact for the financial institution. Naming someone as a trusted contact does not give them any control over your parent’s finances.
Q: What if my parent doesn’t want to name anyone?
That’s their right, and it’s worth respecting. You can share why you think it’s useful and leave the door open, but don’t push. If they’re open to a lighter version of the same idea, some institutions allow for general fraud alerts or two-step verification that adds protection without naming a specific contact.
Q: Is a trusted contact the same as a power of attorney?
No, they’re very different. A power of attorney gives someone legal authority to act on your parent’s behalf, including making financial decisions. A trusted contact has no authority at all. They’re simply someone the bank can reach out to when they have a concern. Many financial advisors recommend having both, but they serve completely different purposes.