Why you should consider adding a trusted contact person (TCP) to your financial accounts
- A trusted contact person (TCP) is someone you authorize your financial institution to contact in certain circumstances, like an emergency contact.
- The institution will only contact them in select circumstances, such as possible financial exploitation, to confirm your contact information, check on a possible health issue or verify the identity of someone authorized to act on your behalf (for example, an agent under a power of attorney or a trustee).
- The person doesn't have access to your account and can't place trades or make cash distributions. Firms generally limit sharing to what’s necessary to address the issue for which they are contacting your TCP.
- A TCP can help prevent financial exploitation or help you when there may be health or cognitive issues that impact your ability to manage your investments.
If you’ve ever given your information to a new doctor’s office, chances are you’ve established an emergency contact person that they should reach out to in case of an emergency. But emergencies can happen outside the realm of healthcare.
For many investors, a suitable equivalent is known as a trusted contact person (TCP), and many financial firms recommend that you establish one.
Here’s more on a TCP and why it may be important to have one for your financial accounts, including your brokerage account.
What is a trusted contact person?
A TCP is someone you authorize your financial institution to contact in certain circumstances – such as if your financial institution has trouble reaching you, suspects financial exploitation, or needs to confirm your contact information, check on a possible health issue or verify the identity of anyone able to act on your behalf.
What can a trusted contact person do?
Making someone a TCP is not the same thing as giving them power of attorney. Unless separately authorized, they cannot make any kind of trades, transactions or decisions about your account, and your firm may only share limited information in limited circumstances.
A TCP can help your financial institution:
- Reach you. They can do this by confirming your current contact information or providing updated information in case you move or change your phone number.
- Understand a possible health issue. If your institution has tried to contact you and hasn’t heard back, your TCP can help explain the situation.
- Verify who can act on your behalf. If someone has been named your executor or granted power of attorney, your TCP can share that with your institution so it has the right information.
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Benefits of adding a TCP
While it may seem unlikely that you’d lose touch with your financial institution, in situations where fraud may compromise the ways your institution contacts you (for example, your email), it can be helpful to have an extra layer of protection. Adding a TCP to your account now means you've taken a step to help protect yourself if something happens in the future, just like having insurance.
Adding a TCP can help safeguard you from situations that can impact your account. For example, TCPs may be contacted if you’re experiencing health or cognitive issues that may affect your ability to manage your investments, if there's a reasonable belief that you're being financially exploited or if the firm needs to confirm who is authorized to act on your behalf. Like adding two-factor authentication for logins, a TCP is another layer that can help ensure your finances stay in your control. If you wait to add a TCP until you need one, it may be too late.
How to add a trusted contact
Adding a TCP is as simple as speaking to your advisor or logging into your online account and selecting the option to do so. You may also receive directions via mail or email. Some institutions allow you to add up to two TCPs, who must be 18 or older and be someone you trust. It's a good idea to let them know you're choosing them as a TCP so they're prepared (and are willing to be involved). What’s more, keep an eye out for scam emails asking you to set up a TCP – the email should come directly from your financial institution and not any outside parties.
If you’re unsure about how to add a TCP, reach out to your institution by phone, email or secure messenger to receive step-by-step instructions.
Be aware that you’ll likely need this information to set up a TCP:
- Their full name
- Address
- Phone number or email address
The bottom line
For investors, adding a TCP helps protect your accounts from fraudulent activity or other incidents where your financial institution may not be able to reach you.
Like an emergency contact, a TCP can help your institution reach you or keep them updated on a crisis in case of emergency.
Like having an emergency contact on file at a hospital, a TCP can be helpful to have on eligible accounts and may come in handy when you least expect it.
Frequently asked questions about trusted contact persons (TCPs)
Yes, investors may be able to add more than one trusted contact person to their account. The trusted contacts can be family members, accountants or other reliable third parties, as long as all persons are at least 18 years old.
No, making someone a trusted contact does not give them financial power of attorney or any power to make decisions about the account. It only authorizes the financial institution to contact them in certain circumstances, such as if the firm can’t get in touch with the account holder.
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