Throughout history the elderly have been looked to as a source of wisdom and of knowledge. Most cultures around the world still hold them in reverence: a people to be respected, admired and cared for. Unfortunately there are those who have less-than-honorable motives and have made them into targets for financial gain. Due to a decrease in cognitive functions, often a caring and trusting attitude, and a lack of knowledge of current concepts, seniors are the main targets of scams. The scam artists come from all different job fronts, and the financial advisor community holds no shortage of those looking to make an easy buck off the elderly. Fortunately, the Consumer Financial Protection Bureau is helping seniors to better understand who they should trust, and which advisors with “senior” designations have actually earned them.
The Office of Financial Protection for Older Americans is the only government agency around that is aimed at helping seniors. This agency is in charge of making sure measures are in place so that Americans aged 62 and older do not fall victim to one of the countless scams around. Their latest report is threefold: help verify the legitimacy of senior designations, find an appropriate advisor for the senior, and help seniors verify credentials. The goal of this office is to make sure that seniors have a helping hand in finding someone to manage their money.
Currently there are more than 50 senior designations out there. Many of the “fake” ones are quite similar in appearance to the “real” ones, often only varying by a letter or the arrangement of the letters. However, a good portion of the designations really have no training background. They are earned by participating in a “free lunch” seminar that was nothing more than a sales seminar designed to sell products. After earning these so-called designations, unscrupulous advisors are selling inappropriate financial products to seniors.
The goal of the CFPB is to make life easier for the consumer. This often means suggesting new laws and regulation to the government. This latest report outlines that the senior designations are too confusing, there are far too many designations, and there is not enough regulation on who can obtain them and how. The suggestions are that with increased training in order to obtain the designations, increased standards of conduct, and increased enforcement of existing laws and standards, this confusion associated with senior designations will diminish greatly. The more rigorous standards will lead to fewer designations, and hopefully less confusion for senior citizens.
There will always be those looking to scam the unsuspecting in order to gain financially. With the help of the CFPB, those scams should be diminishing. But for those who are getting up there in years, they need to be sure to get a second or third look at any product pitched by a financial advisor. If you are still doubtful about the advisor or the product, take some time to call the CFPB and learn more before making any hasty decisions. They are your advocate, and their expertise and authority is spreading rapidly.