Hampton said that the North American Securities Administrators Association (NASAA) has observed a significant increase in designations claiming to provide the holder with expertise in providing services to investors 55 years and older. He said that securities regulators have opened 26 cases in the past year involving "senior specialists" in the eastern half of the United States alone. Most of the cases involve securities recommendations by individuals who are not properly licensed by state securities regulators.
Hampton said that bogus senior specialists commonly target senior investors through seminars where the specialist reviews seniors' assets, including securities portfolios and typically recommends liquidating securities positions and using the proceeds to purchase indexed or variable annuities products or other investments the specialist offers.
In many jurisdictions, including Washington, DC, these recommendations may be viewed as providing investment advice for compensation. "The senior specialist would be offering investment advice for compensation and, therefore, be subject to enforcement action by securities regulatory agencies, unless he or she is a licensed investment adviser," Hampton said.
"Before doing business with any investment professional, all investors, especially senior 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," the acting commissioner added.
For more information, visit the Senior Investor Resource Center on the NASAA website for additional investor education and protection tips for seniors.
