Login | February 19, 2026
Who Do You Want Watching Out for You? A 'Trusted' Contact? Or an 'Emergency' Contact?
JULIE JASON
Published: February 19, 2026
Do you have a "trusted contact" for your brokerage account? Most people don't, according to a 2024 FINRA study.
The idea behind a trusted contact is to give your brokerage firm someone you want them to call if the firm believes something is amiss. A red flag would be "sudden and uncharacteristic behavior, such as requests for large withdrawals, liquidations of long-held securities, or wiring money to foreign accounts," states a post by nationwide law firm Bakhtiari & Harrison, which handles securities arbitration and litigation.
Another would be a change in behavior -- when a client is "appearing fearful, secretive, or flustered, especially when accompanied by a new, overly influential third party like a 'new friend,' caregiver, or online acquaintance."
Or what about an "abrupt [change] to investment strategies, especially a shift from a conservative to a high-risk portfolio, or transactions that seem inconsistent with the client's financial situation and long-term goals" (tinyurl.com/bbfc3k3j).
These are warning signs that the brokerage firm could act on by reaching out to the person you named a "trusted contact."
Sounds good, but you have to ask why only 42% of those surveyed by FINRA actually had a trusted contact. The study (FINRA Foundation's "National Financial Capability Study: 2024 Investor Survey") is referenced in FINRA Regulatory Notice 26-02 (tinyurl.com/8nusf9rp), published in early January of this year.
That notice requested members of the public to share their views. Considering the relatively low usage, FINRA, which oversees member broker-dealers who do business in the U.S., is proposing making a change in nomenclature.
Instead of the term "trusted contact," would "emergency contact" be better, enough so to "bring significantly more value to investor protection" and "increase customer comfort and participation"?
As background, the term "emergency contact" was first suggested last year (see Regulatory Notice 25-07 -- tinyurl.com/3z2vp4cf) when commenters said that customers might be more familiar with or receptive to alternative terminology, such as "emergency contact" instead of "trusted contact."
Among the remarks in favor of a change:
-- The Securities Industry and Financial Markets Association (SIFMA): "We have received numerous reports of individual clients attempting to weigh which person they 'trust the most,' which can lead to inaction by the customer. ... Explicitly permitting alternative names to be used ... would likely have a positive impact on uptake" (tinyurl.com/252fy8ak).
-- LPL Financial: "[T]hat wording [emergency contact] is more commonly used in other contexts such as employment, healthcare, and similar circumstances. This will avoid customer confusion and increase the probability that retail customers provide that information" (tinyurl.com/57c3zxjm).
-- St. John's University School of Law's Securities Arbitration Clinic: "Many customers, including our clients, are confused about the type of authority granted to a trusted contact. They fear that they are handing over decision-making power if they provide information for a trusted contact" (tinyurl.com/yxutkm33).
What's your view? FINRA wants to know. Email pubcom@finra.org to voice your opinion on this question, along with other issues raised in Notice 26-02: "Rule Revisions to Help Member Firms Protect Senior Investors From Financial Exploitation and All Investors From Fraud." You can also use the "Submit a Comment" tab found on the FINRA webpage for Notice 26-02. All comments must be received by March 9, 2026,and they will be made available to the public on FINRA's website.
By the way, "Naming someone as a trusted contact person does not give that person any authority to act on your behalf, execute transactions or engage in activity in your account," states the 2025 FINRA Investor Bulletin "Why You Should Consider Adding a Trusted Contact to Your Account" (tinyurl.com/mwyh6kpy).
To learn more, see FINRA's webpage (tinyurl.com/yz53zf47) and a video (tinyurl.com/s78chnw2).
Seasoned investment counsel (tinyurl.com/52nus8hz) and award-winning columnist and author, Julie Jason, JD, LLM, promotes financial literacy and investor protection. Read her latest book, "The Discerning Investor: Personal Portfolio Management in Retirement for Lawyers (and Their Clients)" (tinyurl.com/4u7h9pjs), published by the American Bar Association. Write to Julie at readers@juliejason.com. While all questions cannot be answered, each email is read and reviewed and can lead to discussion in a future column.
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