There have been an increasing number of financial advisors who call themselves “Senior Specialists.” Often these titles don’t require any specific study or experience. Seniors are a very attractive audience for these “specialists.” They often have a large portion of their investment assets in cash and CDs. As rates have continued to come down, seniors are looking for attractive alternatives with higher yields. Many financial advisors have used “free meal” seminars to attract seniors and sell them a number of CD alternative products. The Securities and Exchange Commission did a study in 2007 noting the deceptive practices used in these seminars.
If you or your parents attend one of these investment seminars, be very careful. Do not sign an application at the seminar. Be critical of the promises made at the meeting regarding guaranteed returns and safety of principal. Often if statements sound too good to be true, they often are. If your parents have attended one of these seminars or have signed an application and given the specialist a check, do some research on the product they purchased. There is usually a grace period allowed to return your parents’ funds if they change their mind.
The SEC provides important information for senior investors including explanations of different products, asset allocation, and risk. You can also get information on affinity fraud, “senior specialists” and investment advisers and what to look for to identify and steer clear of potential frauds on their Senior Investors page.
FINRA provides important information for senior investors. Its website has such items as Broker Check that gives you the ability to look up the history of your investment professional to see if they have prior complaints or problems. Their website also includes including Investor Alerts that provide timely information on steering clear of investment scams and problems instead of just dealing with their aftermath. Subjects of recent alerts include Look Before You Leave: Don’t Be Misled By Early Retirement Investment Pitches That Promise Too Much; Annuities and Senior Citizens: Senior Citizens Should Be Aware of Deceptive Sales Practices When Purchasing Annuities,” and Seniors Beware: What You Should Know About Life Settlements.
The North American Securities Administrators Association (NASAA) also has helpful information available for seniors on its website, ServeOurSeniors.org, developed this to provide resources for senior investors, family caregivers, the securities industry, and policy makers. Resources include: a quick checklist of questions to ask before you invest, 10 tips to protect your nest egg and guidance on where to turn for help.
Regulators have warned that seniors may be confused by designations that imply some expertise in helping seniors. Information regarding professional designations is available through NASAA’s Investor Alerts. There is also SEC information on professional designations and FINR’s Professional Designation Database.
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Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com and receive Bob’s Family Meeting Checklist Guide.
