Financial advisers need to look out for vulnerable clients because financial abuse is common, often hidden, and you may be the only professional in a position to recognise it and act. Elder and domestic financial abuse rarely present as obvious red flags, yet they are increasing and frequently occur within relationships of trust, making them difficult to detect without professional vigilance. This means your role extends beyond providing advice. It includes identifying subtle warning signs, understanding your legal and ethical obligations, and responding in a way that protects your client’s broader wellbeing.

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“You can’t always see control in a Fact Find.”

Financial abuse rarely introduces itself. It doesn’t always come with signs you can tick off on a checklist. But it’s more common than most people realise—and growing fast. In Australia’s ageing population, and in relationships marked by power imbalances, control over money is often used as a weapon. It can show up in small, easy-to-miss ways: a partner answering all the questions, a son managing Mum’s finances but refusing her a debit card, or a long-term client suddenly unsure about decisions they once made confidently.

As a financial adviser or AFS licensee, you’re not just offering strategies and products. You’re building relationships. You’re in a position of trust. And that means you’re also in a position to notice when something doesn’t feel right.

You might be the only professional in that person’s life who sees the signs. Noticing matters. Knowing how to respond matters even more.

Elder financial abuse and domestic financial abuse aren’t fringe issues—they’re mainstream, growing, and increasingly recognised as part of your duty of care. Beyond your legal and compliance obligations, this is about being the kind of adviser people can rely on when it really counts.

This guide (Parts 1 and 2) is here to help you recognise the signs, ask the right questions, and respond in a way that’s informed, appropriate, and supported by best practice.

Because protecting someone’s financial wellbeing often means protecting more than just their money.

At the risk of risking the ire of both AFCA and the FAAA, and being accused of over-reach, what follows is a comprehensive roadmap for advisers and licensees to identify, respond to, and mitigate elder and domestic financial abuse.

We’ll focus on Australian laws, regulations, and expectations – including obligations under the Corporations Act, ASIC regulatory guidance (e.g. RG 271 on complaints, RG 263 on the Financial Services and Credit Panel), the Financial Planners and Advisers Code of Ethics 2019, and relevant decisions and commentary from the Australian Financial Complaints Authority (AFCA). We’ll also reference other industry codes (such as the ABA Banking Code of Practice) and expectations of duty of care from banks and aged care providers. Practical tools, templates, and checklists are provided to help you take action. Throughout, we contrast Australian approaches with international best practices (like the UK and US) to highlight opportunities for improvement.

After reading Parts 1 and 2, you’ll be equipped to protect your most vulnerable clients – an ethical obligation and a regulatory expectation.

Let’s begin by understanding what constitutes elder and domestic financial abuse.

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Understanding Elder Financial Abuse and Domestic Financial Abuse

Elder financial abuse involves the improper use of an older person’s finances by someone in a position of trust. Domestic financial abuse, often a form of family violence, occurs when one person controls or exploits another’s financial resources, usually in intimate or family relationships.

In 2021, the Law Council estimated that up to 185,000 older Australians experience some form of abuse each year, with financial abuse identified as the most common. However, updated national prevalence data from the National Elder Abuse Prevalence Study (NEAPS, 2021) suggest that approximately 14.8% of older Australians experience some form of elder abuse annually, with financial abuse affecting 2.1%. EPOA misuse is frequently involved, often by trusted family members, reinforcing the need for heightened vigilance by advice professionals. Law Council, 2021.

Domestic financial abuse is a form of family violence characterised by controlling behaviours that restrict a person’s autonomy, access to money, or ability to work. According to the Financial Rights Legal Centre, it can include withholding money, incurring debts in the victim’s name, or denying access to joint finances. Unlike elder abuse, it often occurs in intimate partnerships or familial caregiving relationships and may not involve age-related factors.

Additionally, the ABS 2021–22 Personal Safety Survey indicates that economic abuse is a prevalent issue in intimate relationships, with 16% of women and 7.8% of men reporting experiences of economic abuse by a cohabiting partner since the age of 15. These findings highlight the critical role financial advisers play in recognising and addressing signs of financial abuse within domestic settings. While both elder financial abuse and domestic financial abuse involve the misuse of an individual’s financial resources, they differ in context and dynamics. Elder financial abuse typically affects older adults and often involves exploitation by family members, caregivers, or trusted individuals, frequently through mechanisms like misused powers of attorney. In contrast, domestic financial abuse occurs within intimate or familial relationships, regardless of age, and is characterised by controlling behaviours such as restricting access to finances, accumulating debt in the victim’s name, or preventing the victim from working. (Although data suggests that 2/3 of women experiencing abuse are working).

Recognising these nuances is crucial for advisers to tailor their approach effectively.

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Legal and Regulatory Obligations in Australia

Advisers have statutory and regulatory duties and an overarching ethical obligation to act in their clients’ best interests and prioritise their clients’ interests ahead of their own or others’. These foundational principles align closely with the expectations placed on solicitors in similar roles, especially when dealing with older or vulnerable clients, as highlighted in the Law Society of NSW’s guidance on professional conduct.

• The Corporations Act 2001 includes duties to act in the client’s best interests and provide services efficiently, honestly, and fairly.
• ASIC Guidance:
  • RG 271 on complaints handling emphasises sensitivity to vulnerable clients.
  • RG 263 outlines the FSCP’s powers to discipline advisers for ethical breaches.
• Financial Planners and Advisers Code of Ethics 2019: Standards 2, 3, 4, 5, 6, and 12 are especially relevant.
• Standard 2 requires advisers to act with integrity and in the best interests of each client. Ignoring signs of abuse or prioritising another party’s interests breaches this fundamental duty.
• Standard 3 prohibits advisers from acting where they have a conflict of interest or duty. In abuse scenarios, disputes can arise if multiple parties to the abuse are clients or if familial loyalties interfere with objective advice.
• Standard 4 mandates that clients understand the advice, while Standard 5 requires advisers to ensure that client consent is free, informed, and capable. Abuse often undermines both understanding and true consent, especially when coercion or diminished capacity is involved.
• Standard 6 directs advisers to consider the broad effects of their advice on the client’s overall circumstances. This necessitates evaluating whether the advice might enable or perpetuate abuse.
• Standard 12 demands that advisers uphold and promote the ethical standards of the profession, which includes actively safeguarding vulnerable clients from exploitation.

National reform of Enduring Powers of Attorney (EPOAs) is gaining momentum. As acknowledged by the Law Council of Australia, Commonwealth, state, and territory Attorneys-General have prioritised EPOA law reform to create more consistent and protective frameworks. These efforts respond to widespread concern over the ease with which EPOAs can be exploited, particularly by family members. Law Council, 2021

The FAAA recommends reviewing privacy and whistleblower protection laws to ensure that relevant information can be safely shared when financial abuse is suspected. Additionally, they propose the national harmonisation of state-based estate planning laws and the establishment of a national register of Powers of Attorney. These measures aim to close existing legal gaps and facilitate more effective prevention and response to financial abuse.

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Industry Codes and Expectations

• AFCA holds firms accountable if they fail to act on suspected abuse; it expects firms to have proactive procedures. AFCA’s draft approach to family violence emphasises the need for firms to recognise and respond to financial abuse proactively. It advises that firms should not require evidence of abuse disclosure and should implement trauma-informed practices to support affected clients. The Australian Financial Complaints Authority (AFCA) underscores firms’ need to proactively recognise and respond to financial abuse. It advises against requiring evidence of abuse disclosure and recommends implementing trauma-informed practices to support affected clients.
• ABA Banking Code of Practice: Commits banks to extra care for vulnerable customers. Clause 36 of the 2023 Code states: “We will take extra care with customers who may be vulnerable, including in situations of age-related impairment, elder abuse, family or domestic violence, cognitive impairment or serious illness.” Banks are expected to proactively identify and support vulnerable clients, including implementing private discussions, transaction reviews, and delayed execution when financial abuse is suspected. The ABA’s Industry Guideline on Preventing and Responding to Family and Domestic Violence outlines best practices for banks, including training staff to act with sensitivity, respect, and compassion, and working with customers to find suitable ways to undertake their banking. These practices serve as a benchmark for financial advisers to emulate in supporting clients experiencing domestic financial abuse. While financial advisers are not direct parties to the Code, its principles offer a best-practice benchmark that advisers and licensees should emulate, especially as AFCA and ASIC increasingly reference it in decisions about vulnerability and fairness.
• Aged Care Quality Standards: Require aged care providers to act on suspected financial abuse. Standard 8 (Organisational Governance) obliges providers to demonstrate that risks to consumers’ safety, health, and well-being are identified and managed. This includes financial abuse, particularly where residents exhibit signs of cognitive decline or dependence. While these standards apply to care providers, advisers should be alert to how aged care settings may conceal or expose abuse, and work collaboratively with aged care professionals to safeguard clients. Like the ABA Code, these standards reflect an increasing expectation that all professionals interacting with vulnerable adults have both a duty to recognise abuse and a responsibility to respond.
• In its submission to AFCA, Financial Counselling Victoria highlighted the critical need for trauma-informed, safety-first practices when addressing financial complaints involving family violence and elder abuse.
• The financial advice profession is increasingly recognised as pivotal in identifying and addressing financial abuse. The Financial Advice Association Australia (FAAA) emphasises that financial advisers are uniquely positioned to detect signs of financial abuse due to their close relationships with clients and their families. 

In its submission to the Parliamentary Joint Committee on Corporations and Financial Services, the FAAA highlighted several areas requiring urgent attention:​

• Lack of Consistent Protocols: The profession currently lacks standardised procedures for handling suspected financial abuse, leading to uncertainty in response and support for affected clients.
• Privacy and Whistleblower Protections: Existing privacy laws and insufficient whistleblower protections hinder effective collaboration and information sharing when financial abuse is suspected.

To address these challenges, the FAAA recommended:

• Development of Standardised Frameworks: Establishing clear identification, reporting, and escalation protocols to guide advisers in responding to financial abuse cases.
• Centralised Resources: Creating a central repository of training materials, information, and support resources for advisers and affected clients. Financial Advice Association Australia
• Legal Reforms: Reviewing and amending privacy and whistleblower protection laws to facilitate safe information sharing when financial abuse is suspected.
• National Consistency: Harmonising state-based estate planning laws and creating a national register of Powers of Attorney to reduce confusion and potential exploitation.
• Public Awareness and Support: Launch initiatives to raise public awareness about financial abuse and establish a dedicated hotline for consumers and service providers.

If you’re an advice professional, keeping up with evolving standards isn’t optional. Meeting minimum legal standards isn’t nearly enough when your clients are vulnerable; your role is to protect them, not just advise them. That’s the difference between being a true professional and simply pushing product.

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Identifying Vulnerability and Red Flags

The Law Council of Australia’s Best Practice Guide for Legal Practitioners about Elder Financial Abuse (June 2023) identifies a comprehensive set of indicators across behavioural, transactional, relational, and procedural dimensions.

These warning signs should be viewed collectively and not in isolation. Their presence warrants heightened scrutiny, professional judgment, and appropriate action from financial advisers.

Physical and Behavioural Indicators

Client Presentation

• Signs of distress, confusion, or anxiety
• Neglected personal care or dishevelled appearance
• Hesitation or visible stress when discussing transactions or naming beneficiaries
• Indications of alcohol or substance dependency affecting judgment

Communication Patterns

• Difficulty explaining or recalling the reasons for financial decisions
• Frequently changing or inconsistent instructions
• Apparent reluctance to speak freely, especially in the presence of others
• Language barriers impair the understanding of advice or implications

Financial Transaction Red Flags

• Changes to Long-standing Arrangements
• Abrupt changes to wills or established financial plans
• Exclusion of long-term beneficiaries in favour of newer individuals
• Inclusion of recently formed acquaintances in major asset transfers

Asset Management Concerns

• Transfer of significant assets for minimal or no consideration
• Large withdrawals or asset shifts inconsistent with client history
• Transactions that appear to disadvantage the client’s financial well-being

Professional Service Patterns

Legal or Professional Representation

• Frequent changes in adviser or legal representation
• Appointment of advisers who are also advising potential beneficiaries
• Refusal to obtain or follow independent professional advice
  • Repeated requests to redraft documents, particularly when prompted by others, may indicate external pressure. Advisers should record why changes are being made and seek independent validation where doubt exists. LSJ, 2017

Document Handling

• Documents drafted or amended at the suggestion of a beneficiary
• Pressure to sign documents immediately or without explanation
• Lack of opportunity for the client to reflect or seek external input

Relationship Dynamics

Dependency and Isolation

• Increased reliance on a particular family member or carer
• Evidence of restricted communication with other trusted individuals
• Physical or emotional control by a third party
• Emotional manipulation is one of the most insidious forms of abuse. Greedy relatives may not use overt coercion but instead exploit emotional bonds, guilt, or dependency to influence decisions. Advisers should be sensitive to clients expressing undue gratitude, indebtedness, or fear of disappointing family—these may be subtle signs of abuse. LSJ, 2017

Power Imbalances

• Indicators of coercion, such as clients deferring under duress
• Financial decisions favouring carers or family without a clear rationale
• Suspicious or unexplained use of powers of attorney

Professional Response Requirements

Documentation

• Maintain detailed, contemporaneous file notes
• Record observations and all third-party interactions
• Note any assessments of capacity or referrals for medical opinions

Action Steps

• Consider seeking expert assessment (e.g., medical, legal)
• Consult compliance or legal colleagues for peer review
• Refer or report concerns to appropriate authorities or elder support services
• Apply protective measures such as delaying transactions or involving external guardianship

Recognising the critical role of financial advisers in identifying financial abuse, the FAAA advocates for creating a central source of training, information, and support. Such resources would equip advisers with the tools and knowledge to detect and address financial abuse effectively.

In addition, advisers should adopt trauma-informed practices to support clients who may have experienced financial abuse. This approach involves:

• Safety: Ensuring the client’s physical and emotional safety during interactions.
• Trustworthiness: Being transparent about processes and decisions to build trust.
• Empowerment: Encouraging clients to make informed decisions and regain control over their finances.
• Collaboration: Working jointly with clients, respecting their autonomy and choices.
• Cultural Sensitivity: Being aware of and responsive to cultural, historical, and gender considerations.

Implementing these principles can help prevent re-traumatisation and promote recovery.

The FAAA highlights the absence of a straightforward method for reporting or assisting clients subjected to financial abuse. To address this, they recommend the development of a standard identification, reporting, and escalation framework. Implementing such a framework would provide advisers with consistent protocols, enhancing their ability to respond effectively to suspected abuse cases.

Advisers should remain aware that, like legal practitioners, they bear a professional and ethical obligation to recognise and respond to capacity issues and the risk of undue influence. As highlighted in the Law Society of NSW’s publication Solicitor’s Rules and Ethical Responsibilities when Dealing with Older Clients, client autonomy must be supported by robust processes that ensure genuine, informed consent. This includes actively creating environments that reduce intimidation, encouraging questions, and verifying understanding without relying on third-party affirmations.

• Client Behaviours:
  • Deference to others for financial decisions: This can indicate an imbalance of power or influence, particularly if the client previously made independent decisions. It is especially concerning if the client consistently defers to a single individual who may benefit from the decisions being made.
  • Confusion or anxiety about financial matters: Cognitive impairment, fear of disapproval, or coercion can manifest in anxiety or hesitation. A client who was previously clear and confident but now appears uncertain or worried may be under duress or manipulation.
  • Unexplained account activity: Large or unusual transactions, withdrawals from unfamiliar locations, or a sudden increase in account activity are often early indicators of financial abuse. These patterns should prompt further inquiry and a review of transaction authority.
• Situational Factors:
  • Recent loss of a spouse or changes in health: Bereavement or health decline can increase dependency and reduce vigilance, making clients more vulnerable to exploitation. Predators often take advantage of grief or cognitive decline to assume control of financial matters.
  • New individuals exerting influence over finances: The emergence of new “helpers” or family members suddenly becoming involved in financial decision-making should raise concerns, especially if they seek to exclude others or discourage private communication with the adviser. This behaviour may be part of a coercive control strategy.

Beyond individual adviser actions, the FAAA underscores the importance of broader initiatives, such as raising public awareness of financial abuse and establishing a hotline for consumers and service providers. These efforts would create a more informed public and provide accessible support channels for those affected.

Take Action: Strengthen Your Commitment to Protecting Vulnerable Clients

Financial abuse, whether targeting older Australians or occurring within domestic settings, poses significant risks to clients’ well-being and financial security. As a trusted adviser, you have the opportunity—and responsibility—to make a meaningful difference.

Here’s how you can act today:

• Review and Update Your Policies: Ensure your firm’s procedures align with the latest best practices for identifying and addressing financial abuse.
• Engage in Training: Participate in or organise training sessions to recognise signs of financial abuse and implement trauma-informed care.
• Collaborate with Support Services: Establish connections with legal, medical, and social support services to provide comprehensive assistance to needy clients.
• Promote Awareness: Share resources and information with colleagues and clients to raise awareness about the signs and implications of financial abuse.

By taking these steps, you fulfil your ethical and regulatory obligations and reinforce your role as a protector of your clients’ interests. Let’s work together to create a safer financial environment for all.

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Appendix A: Professional Response Requirements: Identifying and Addressing Financial Abuse

Financial advisers are uniquely positioned to detect and respond to signs of financial abuse due to their close relationships with clients. Implementing structured protocols can significantly enhance the protection of vulnerable clients. The following steps are recommended:

1. Recognise Red Flags of Financial Abuse

Advisers should be vigilant for indicators that may suggest a client is experiencing financial abuse. Key warning signs include:

• Unusual Account Activity: Sudden changes in banking patterns, such as large withdrawals or transfers inconsistent with the client’s typical behaviour.
• Third-Party Control: A person accompanying the client who dominates conversations or appears to control the client’s decisions.
• Client Behaviour: The client seems fearful, anxious, or reluctant to speak in the presence of a particular individual. Australian Banking Association
• Documentation Issues: Discrepancies or sudden changes in legal documents, such as wills or powers of attorney, without clear justification.
• Isolation: The client lacks knowledge about their financial situation or expresses confusion over financial matters. Australian Banking Association

2. Implement Structured Escalation Protocols

Upon identifying potential abuse, advisers should follow a clear escalation process:

• Internal Reporting: Document and report the concerns to the firm’s compliance officer or designated safeguarding lead.
• Client Engagement: Discuss concerns with the client in a safe and private setting, ensuring they feel supported and understood.
• External Support: With the client’s consent, refer them to appropriate external agencies, such as legal aid services or financial counselling organisations.
• Regulatory Reporting: If necessary, report the situation to relevant authorities, ensuring compliance with legal obligations and privacy considerations.

Source: ABA Financial Abuse Industry Guideline

3. Develop and Maintain Internal Resources

Firms should establish resources and training to support staff in identifying and managing financial abuse cases:

• Training Programs: Regularly train staff on recognising signs of financial abuse and appropriate response strategies.
• Policy Development: Create and update policies that outline procedures for handling suspected financial abuse.
• Resource Accessibility: Ensure staff have access to up-to-date information on support services and legal obligations.

Source: FAAA Recommendations on Financial Abuse

4. Foster Collaborative Relationships

Building relationships with external organisations can enhance support for clients:

• Partnerships: Connect with local support services, such as domestic violence shelters and elder advocacy groups.
• Referral Networks: Develop a network of trusted professionals to whom clients can be referred for additional assistance.
• Community Engagement: Participate in community initiatives to raise awareness and prevent financial abuse.

By integrating these practices, financial advisers can play a pivotal role in safeguarding clients against financial abuse, upholding ethical standards, and fostering trust within the client-adviser relationship.

You’re often the first line of defence when something isn’t right. Don’t stop at recognising the signs. In Part 2, you’ll learn how to respond confidently, document concerns, and take appropriate action to protect your clients.

For support in implementing these strategies, contact Assured Support.

If you liked this, you might also enjoy:

• Protecting Vulnerable Clients: Responding to Elder Abuse and Domestic Financial Abuse (Part 2)
• Dealing with vulnerable clients
• ASIC Governance imperatives for 2026

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Frequently Asked Questions