Bismarck, ND - ND Securities Commissioner Karen Tyler urged seniors to carefully check the credentials of individuals holding themselves out as senior specialists.
Individuals may call themselves a 'senior specialist' to create a false level of comfort among seniors by implying a certain level of training on issues important to those 55 and older. But the training they receive is often nothing more than marketing and selling techniques targeting seniors, said Tyler.
These sales people and the alphabet soup of letters after their names can be confusing, and in some cases, may even be deceptive, Tyler said.
Tyler 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, and state securities regulators are seeing an increase in enforcement actions involving senior specialists. Most of the cases involve securities recommendations by individuals who are not properly licensed by state securities regulators.
In many of the cases that resulted in enforcement actions, senior specialists targeted senior investors through seminars where the specialist reviewed seniors' assets, including securities portfolios. The senior specialist then typically recommended liquidating securities positions and using the proceeds to purchase indexed or variable annuities products or other investments the specialist offered.
In many jurisdictions, including North Dakota, these recommendations may be viewed as providing investment advice for compensation. The senior specialist would be offering investment advice as an unregistered investment adviser and, therefore, be subject to enforcement action by regulatory authorities, Tyler said.
Although there are legitimate organizations whose members must complete rigorous programs of study, pass extensive examinations, and have practical experience in order to receive their designations, a number of entities formed in the last few years have created designations with much less stringent requirements. Without reviewing the course material for each of these designations, it is difficult to verify the claims made by the promoters.
The ND Securities Department has taken enforcement actions against four North Dakota residents holding a senior designation. Senior designations are not a guarantee of ethical conduct. 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, Tyler said.
For more information, contact the North Dakota Securities Department at (701) 328-2910 or (800) 297-5124. You can also visit the Senior Investor Resource Center on the NASAA website at www.nasaa.org.