Senior investors aged 55 and older control more than 70% of the nations’ wealth according to a Kemper Funds study in 2007. This fact is known too well among some people who are ‘preying’ on the elderly using such titles as “certified financial advisor” – titles that when used fraudulently can lead to financial disaster for many seniors in California. Recently, Insurance Commissioner Steve Poizner announced a $10,050,000 settlement with Allianz Life Insurance Company for allegedly targeting thousands of seniors in deceptive annuity sales, many of those sales made by agents using such deceptive designations.
This is just one of many examples where licensed agents use designations like this one because elders trust these titles. With no current standards set by state law for people claiming to be specialists in senior financial advising, elders can easily be duped by someone who might have just taken a two-hour internet course and received a paper certificate that is meaningless.
California currently has an Assembly bill pending sponsored by Assemblymember Patty Berg (D-Eureka) that will protect senior citizens from this growing problem of financial scams. In AB 2149 Berg calls for tighter control on the language financial consultants and life insurance agents can use to promote themselves. It specifically bans them from using a credential or professional designation indicating or implying that he or she has a special certification or training in advising senior investors. Only people who have completed a certain amount of state-recognized education would be able to use such a title.
AB 2149 also appoints the Department of Corporations to be responsible for recognizing accredited organizations and creating the standards for the use of "Certified Senior Advisor." It would compile a list of people using those credentials as well.
Senator Herb Kohl (D-Wis.), chairman of the U.S. Senate Special Committee on Aging also recently introduced a bill to offer states the resources necessary to protect seniors from phony financial advisors preying on the retirement savings of the elderly by touting misleading or fraudulent “senior credentials.” Effectively supporting what Berg’s bills would require in California, the Senior Investor Protection Act of 2008 (S.2794) would create a new grant program encouraging state regulators to adopt a uniform standard for the accreditation of senior financial advisors as outlined in the North American Securities Administrators Association’s (NASAA) new model rule and assisting states in their efforts to protect seniors from being deceived by these misleading designations. See Senator Kohl’s recent press release for more information.
CHA encourages your support of these long-overdue pieces of legislation. Elder financial abuse is one of the fastest growing segments of crime, and in California in particular, nearly a quarter million older adults fall prey to some sort of swindle or abuse each year. A recent New York Times investigation found that the number of "certified" senior experts in the sales force has increased 78% in the last 5 years. While some of these agents are, of course, legitimate experts, many either obtain their “credentials” through dubious means, or simply invent a title themselves.
Every service provider should be accountable for the work they offer - especially when that service regards the life savings and investments of our seniors. Contact your state Senator or Assemblymember and your representative in Congress to encourage them to support these important pieces of legislation.