KOHL REINTRODUCES BILL TO SAFEGUARD SENIOR INVESTORS FROM UNQUALIFIED ADVISORS
WASHINGTON - This week U.S. Senator Herb Kohl (D-WI), Chairman of the U.S. Senate Special Committee on Aging, reintroduced a bill to offer states the resources necessary to protect seniors from unscrupulous financial advisors who prey on the retirement savings of the elderly by touting misleading or fraudulent "senior designations." The Senior Investor Protection Act of 2009 (S. 906) would create a new grant program to encourage state regulators to adopt a uniform standard for the accreditation of senior financial advisors and to assist states in their efforts to protect seniors from being duped by these misleading designations. Many seniors targeted by salesmen using these designations have lost their life savings because they were steered toward investment instruments that were unsuitable for them, given their retirement needs and life expectancy.
"Too many seniors are placing their trust in these bad actors, who in many cases are one step above scam artists," said Chairman Kohl. "These individuals often have limited or no education or training, though they boast titles with legitimate-sounding names, and in many cases have an interest in steering seniors to certain complex financial products that are inappropriate for them."
The bill provides states with incentives to improve their own rules regulating the use of designations by encouraging them to adopt provisions outlined in the North American Securities Administrators Association's (NASAA) and the National Association of Insurance Commissioners' (NAIC) new model rules on the use of senior designations.
The grants provided by the legislation are designed to give states the flexibility to use funds for a wide variety of senior investor protection efforts, including: hiring additional staff to investigate and prosecute cases; funding new technology, equipment and training for regulators, prosecutors, and law enforcement; and providing educational materials to increase awareness and understanding of designations.
In September 2007, Chairman Kohl held a hearing to examine some of the questionable practices used by so-called senior financial investment specialists in order to gain access to the retirement savings of older Americans. An investigation conducted by the Aging Committee revealed that many of the designations that have been cropping up represent limited or no value with respect to advising seniors on financial matters, and that often these designations are obtained simply by attending a weekend seminar and passing an open-book, multiple-choice test.
This bill has been endorsed by the North American Securities Administrators Association (NASAA), National Organization for Competency Assurance (NOCA), The American College, Financial Planning Association, Fund Democracy, Consumer Federation of America, Alliance for Retired Americans, National Association of Personal Financial Advisors (NAPFA), Older Women's League (OWL) and Financial Certified Planners Board of Standards (CFP Board).
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