Don't be a target for fraud that targets seniors

With trillions of assets and plenty of time to listen to sales pitches, seniors have become popular targets for fraud. Promises of windfalls from persistent telemarketers and self-proclaimed financial specialists with shaky credentials have made fraud against those 65 and older a profitable business " one that's poised to explode.

The upcoming retirement of the boomer generation means that the vast majority of American's net worth will soon be in the hands of the newly retired. "Scam artists will swarm like locusts over this increasingly vulnerable group because that's where the money is," Securities and Exchange Commission Chairman Christopher Cox warned in a 2006 speech.

To protect yourself, "find out all you can about the individual and the company," says Joseph Borg, president of the North American Securities Administrators Association, the U.S.'s oldest international investor-protection organization. Do business only with financial advisors and financial institutions with proven track records " and keep these five tips in mind:

1) Beware of impressive-sounding titles that suggest expertise in advising seniors. Some examples are "senior specialist," "retirement specialist" and "certified financial gerontologist." Many titles mean nothing or can be secured with little more than a membership fee. Most legitimate investment salespeople have to be licensed and registered with the SEC, a state securities regulator or FINRA, the Financial Industry Regulatory Authority.

2) Avoid investments that aren't suited to your situation or stage of life. Certain investments have withdrawal penalties or otherwise lack liquidity and may not be a good option for retirees. These include certain annuities and real estate investments. FINRA recommends watching out for products that involve using your home equity or retirement savings to fund high-risk investments. A financial adviser who knows you and your retirement circumstances can help you tell which opportunities are the best bets for your specific situation.

3) Be cautious when told that investment decisions have to be made immediately or in secret. If a salesman uses the high-pressure tactic of saying that your investment decisions have to be made on the spot, don't comply. Such decisions should be made only after you have had time to think and make sure that you know all the facts. Also, avoid anyone who insists that you make your decision without discussing it with family members and other advisors. A legitimate seller has no need for secrecy.

4) Be suspicious of one-size-fits-all sales pitches. A responsible financial advisor will want to learn about your individual circumstances before recommending any investment or strategy. They should ask about your financial goals, investment time horizon and risk tolerance. If they don't, how can they suggest ideas that are right for you? One size can never fit all investors.

5) Avoid e-mail and Internet scams aimed at seniors. Ignore unsolicited e-mail. E-mail

scams may claim to be searching for business partners and promise high returns on the next big investment opportunity. The Internet is one of the cheapest avenues for con artists, who buy millions of e-mail addresses for a few hundred dollars. It's also one of the hardest forms of fraud to prosecute. If you don't know the e-mail's sender, don't even open it.

- William Creekbaum is the first vice president of Wealth Management Senior Investment Management Consultant in Reno. Contact him at 689-8704 or william.a.creekbaum@smithbarney.com.