News Article: Alito: Congress Can't Tell SC What to Do

[TIDE-HSV]

KYC is primarily to know with a reasonable degree of certainty that (1) the client isn’t using the account (whether a bank or an investment account) to do or cover up anything illegal, and (2) that they don’t have a history of illegal activity. There are already protocols for Politically Exposed Persons (PEPs), and that term is defined in the regulations.

In the case of PEPs, it’d be pretty easy to know about any past illegal actions, and there’s a lot of automated monitoring of bank account activity to flag anything suspicious. I don’t know about investment accounts, but I’d imagine there are similar regulatory requirements.

The things a manager would need to know include the client’s age and whether there are any considerations that would indicate a shorter or longer investment horizon than is normal for his or her age.

You wouldn’t necessarily need to know their exact age. A 3-5 year range would be fine for purposes of investment allocation and would provide camouflage for the individual in question.

Then you‘d need to know if there are unusual circumstances — say a disabled spouse or adult child that can’t be expected to care for themselves. Maybe providing support for a disabled relative outside of the immediate family. Maybe children approaching college age. Maybe a medical condition that indicates a life expectancy shorter than normal.

The possibilities are endless, but you get the idea. Anything that could cause the investment horizon to be different from what you would normally expect for an investor of a given chronological age.

One possible sticking point I can see is when the potential officeholder or spouse has a closely-held business. Its performance could affect the rest of the investment allocations. Though as I think about it, you might be able to feed the manager raw performance data without identifying the business.

So yes, there would be some details to address and loose ends to tie up, but I think all of this can be addressed, and the managers wouldn’t have to know whose assets they’re managing.

Yes, they do. I made some sizable disbursements out of trust funds for grandchildren out of Fidelity. Even though they have my voice print, I had to prove identity in other ways...

 

[4Q Basket Case]

Yes, they do. I made some sizable disbursements out of trust funds for grandchildren out of Fidelity. Even though they have my voice print, I had to prove identity in other ways...

Glad to hear that. The small inconvenience of having to prove you are who you say you are is a low low price to pay for protection for you, the trust, and the grands.

 

[Crimson1967]