Q&A with David Edwards: Does the Patriot Act require that personal investment accounts need to be disclosed before inheriting brokerage accounts?

Question: My mom recently passed away. She left myself and my siblings equal distributions from her brokerage accounts. Her financial advisor wants each of us to provide a detailed accounting of our current, personal investment accounts. He cites the need to comply with the Patriot Act. Does the Patriot Act require this?


Answer: The Patriot Act requires that brokers positively identify new clients before opening an account. This need is typically satisfied by providing a driver's licence number or passport number. Obviously, it would be impossible to open your account without name, address and social security number. You can view the full list of information that a broker may request by clicking here.

It's not unreasonable for an advisor to ask for this information, but it's not acceptable to claim that you MUST provide it to comply with the Patriot Act - that is not a true statement. In other words, the broker CAN ask, but you DON'T HAVE TO provide information about your income, net worth, profession or investment objectives.

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