It's been said that an educated population is the best defense of a nation. So, too, might an educated investor base be the best defense against financial scams targeting seniors.

In their efforts to combat elder financial abuse, regulators, advocacy groups and industry officials understand that they are not fighting a war that can be won, but are instead focusing much of their energies on promoting education and awareness about the issue.

In a panel discussion at FINRA's annual conference in Washington last week, officials described recent efforts to reach out to senior investors, including a helpline the industry regulator set up in April. (FINRA's helpline: 844-57-HELPS or 844-574-3577)


Jeffrey Pasquerella, vice president and regional director of FINRA's southern region, says that staffers manning the helpline have fielded hundreds of calls on a range of issues like the difference between variable and fixed annuities and complaints about poor performance, fraud or churning.

"The calls have varied in nature," Pasquerella says. "Our callers have ranged from ages 40 to 100."

Indeed, he stresses that the helpline is by no means intended to be limited to investors of a certain age, saying that FINRA welcomes calls from adult children inquiring about their parents' brokers or appealing for help if they are struggling to retrieve assets from a deceased relative's account.

In some cases, a call to the helpline could prompt FINRA staff to reach out to local authorities to initiate a wellness check. One of those cases involved a man who has called the FINRA line numerous times, "forgetting he's previously called us," Pasquerella recalls.

"His issues with his account actually happened three years ago. He thought it happened this week, and his account was actually closed at the firm," he says. "We know that from talking to the firm he has no family, no beneficiaries and we're worried about his ability to actually take care of himself. So, some of these issues that we're dealing with go beyond the financial space -- it just goes to general human interest and caring."

Ron Long, director of regulatory affairs and elder client initiatives at Wells Fargo Advisors and a noted expert on senior issues, welcomes FINRA's helpline effort, saying the regulator is beginning to field the same questions and face the same challenges with older clients that are all too familiar for many brokers.

"These are the calls that broker-dealers have been getting for years," Long says. "To spend 10 hours on the phone with someone who may not be all there, that's a real, almost everyday occurrence for a lot of the brokerage firms."


The AARP, which consulted with FINRA as it was setting up the helpline, is taking a more assertive approach to addressing elder abuse issues. Amy Nofziger of the AARP Foundation describes a recent effort to reach out directly to potentially vulnerable seniors through what she describes as "reverse boiler rooms," where staffers and volunteers cold-call individuals on marketing lists the organization has purchased and talk to them about common scams, last year reaching more than 100,000 people.

The advice Nofziger has for AARP's cold-callers could apply in equal measure to advisors working with older clients. She tells them to speak slowly and draw out the points they want to make at a modest pace, noting that seniors' ability to process information tends to dissipate, even if they are otherwise in command of their faculties.

"Don't just rattle it off as you might if you were just talking to a friend," she says.


At Wells Fargo Advisors, Long has helped oversee the development of a formal training program that he says is mandatory for all employees, not just those who work directly with customers.

Then last year Wells Fargo set up a small centralized unit with fewer than 10 staffers who respond to senior issues that advisors have reported, including a pair who work as intake personnel, fielding the initial referrals, and a larger team who serve as case managers and make the determination whether to escalate issues to Adult Protective Services or, if the situation is "egregious enough, make a call to law enforcement," Long says.

"But more importantly, they're there for advice," he says. The centralized unit is intended to serve as a resource for advisors in the field who might not be sure how to respond to a client who appears to be slipping or makes an unusual request that suggests that they could be the target of a scam.


Once an elderly investor has fallen victim to abuse, the assets are rarely recovered, so Long's team has developed a series of broad steps that aim to help advisors protect their clients, or at least mitigate the extent of the damages, beginning with observing their behavior.

"Know more about the client," Long says. "See if there are changes in the person who's normally neat as a pin all of a sudden looking disheveled and unkempt."

Then, if a client suddenly asks for a withdrawal 10 times larger than sum they routinely take out each month, Long coaches advisors to respond with healthy skepticism. Still, he acknowledges that clients who believe they've won a foreign sweepstakes or fall for the infamous "Nigerian prince" email scam can be determined and difficult to dissuade.

"We do try to talk them out of it," he says. "Sometimes it's hard to talk them down off the ledge once they do believe they've won the Costa Rican lottery."

In the cases where the client insists, Long counsels advisors to "negotiate," essentially conceding to part with a small sum while withholding the bulk of the withdrawal to buy time to refer the case to a relative or to the appropriate authorities.

"You need the $50,000, it's got to go to Nigeria tomorrow," he says. "Maybe I can get you $500 today, $49,500 10 days from today, and use that time to get somebody else engaged."

Read more:

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access