As the elder population increases, various forms of elder abuse are on the rise. This includes investment fraud and outright theft. Scam artists especially target senior citizens who have seen their investment portfolios decline in value.
One facet of the elder financial abuse problem is the proliferation of so-called senior specialists, who claim to have some form of expertise in advising seniors on structuring their investments so as to reduce taxes and market risk and avoid probate. While some organizations have legitimate courses of study and examinations, many require little or no training. In one case, prosecuted by the Massachusetts securities regulators, an individual could receive a senior specialist designation by taking a three-day course or a home course followed by a multiple choice exam.
It is common practice for purported senior specialists to mass mail invitations to seniors to attend a free dinner and seminar. Typically, attendees are encouraged to contact the presenter after the seminar, who then recommends liquidating their portfolio and buying equity indexed annuities, variable annuities or other products sold by the senior specialist. These are insurance products with high commissions, long holding periods and penalties for early withdrawals, which makes them unsuitable for many retirees.
Senior specialists have been on regulators’ radar screen for some time, and remain a chronic problem. Regulators are concerned that seniors will feel a false sense of security when presented with claims of expertise in senior issues. Often the senior specialist is violating applicable securities laws by acting as an unregistered investment advisor.
Before doing business with someone holding themselves out as a senior specialist or similar designation, investors should check with their state securities regulator to determine whether the individual is properly licensed and if there have been any complaints or disciplinary problems involving the individual or his or her firm.
For information on how to contact your regulator, go to http://www.nasaa.org/QuickLinks/ContactYourRegulator.cfm. Investors may also check their brokers’ complaint and disciplinary record by going to FINRA BrokerCheck at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 45 occasions. Page Perry’s attorneys have extensive experience in representing senior investors in securities matters. For further information, please contact us.