Few things will get me going like senior fraud. It is right up there with abusing a baby or kicking a puppy. It's quite simply a despicable crime that should garner no sympathy for those who commit such offenses.
It is a national problem and needs attention from politicians and regulators as well as all of us in the financial services industry. It is the responsibility of all of us to protect older Americans from fraud, abuse and the sale of unsuitable investments.
How many times must a senior come in with a statement from another firm wanting to transfer their portfolios that are loaded with IPOs and other inappropriate securities? This is happening in my practice far too often. So what is anyone doing?
William F. Galvin, Massachusetts secretary for the commonwealth has a proposal. After filing charges against two annuity salesmen, Galvin proposed the nation's first set of regulations requiring advisors who claim expertise or certification in financial issues affecting older Americans to prove they have the special training to do so. Many of the designations I have seen are simply marketing tools. Members of my staff have investigated a few of the "senior expert" designations and can find no licensure or regulatory issuance.
With the first of the baby boomers turning 60 this past year, the Washington-based North American Securities Administrators Association Inc. warned in a study that investment fraud against the elderly, which already accounts for half of all investor complaints received by state securities regulators, could grow significantly in the coming years.
And why not? More seniors means more people to prey on. All of the number are there to see, 76 million baby boomers with $8.5 trillion in investable assets. Ask anyone in financial services and they will tell you that retiring the boomers is one of the most important issues facing our industry. And one of the most challenging.
With a boomer turning 60 every eight seconds, there needs to be an increase in training and resources for federal and state law enforcement officials to investigate and prosecute senior fraud.
It is essential that the SEC fine tune its partnerships with state regulators to safeguard older folks. Initiatives at the state and federal levels need to be put in place to find ways to detect abusive sales tactics. I also advocate increased awareness with investor education programs. There are lots of classes and seminars on what to invest your money in, but how many tell you what not to invest in? Classes should be about education and have no sales motives.
All regulatory agencies need to continue working to shut down scams that target older Americans. As the rewards get bigger for the scammers, there will continue to be a proliferation of unlicensed individuals selling unregulated securities to older people and this is just plain wrong.
What can you as a senior do?
Ask questions about the advisor's qualifications and the products that he or she is offering. Check facts with the NASD, State Insurance Board or the Secretary of State.
If it sounds too good to be true, it probably is, so do not fall for this one. Once the damage is done, it often cannot be recouped.
When I see those statements come in from other firms, I know there is little I or other qualified advisors can do to recoup the losses and that is really unfair. White-collar crime just does not get the attention that other crimes do, but it can be equally damaging to the person that is a victim.
If you are a senior and wish to learn more about how to protect yourself, contact our office for some no-obligation information. Helping protect seniors is critical. We can be contacted at 841-4277 or on our Web site at www.lpl.com/cpassociates.
• Carol Perry, of Carol Perry and Associates, has been a resident of Northern Nevada since 1983.