Senior citizen investment fraud is on the rise, and many advisors are putting seniors in inappropriate and costly investments, according to The Los Angeles Times.
A survey by the North American Securities Administrators Association suggests that fraud against seniors has risen 44% in the last year, said Joseph Borg, the organization’s president.
Massachusetts’s secretary of the commonwealth William Francis Galvin related to the Senate’s U.S. Special Committee on Aging that there is “a widespread pattern of purported senior specialists using sophisticated marketing tools to give senior citizens the impression that they are acting as their unbiased, knowledgeable, and independent advisor, when the real objective is to convince them to purchase a product that the specialist offers.”
These so-called specialists in some cases have just filled out a five-minute online application with the National Ethics Bureau, a for-profit company that purports to certify a salesperson’s ethical caliber with its “Seal of Trust,” Galvin said.
The “Certified Senior Advisor” name issued by the Society of Senior Financial Advisors also is “primarily a marketing tool” that doesn’t require meaningful training, Galvin said.
The society defended its training and designation in testimony to the panel but said its program didn’t qualify anyone to give investment advice.
Massachusetts recently adopted a regulation that bans broker/dealers and financial advisers from using a designation that has not been accredited by a reputable national accreditation organization. No other state has such measures in place.