CFPB Claims That Senior Designations Are "Confusing"
One common way investors evaluate their stockbrokers and advisors for credibility is by looking at their credentials. Unfortunately, a slew of new credentials have cropped up in recent times, many of which allow shady advisors to prey on seniors so they can sell them scam products and unsuitable investments.
Currently, there are approximately 100 financial credentials available. One designation is the "senior specialist" designation that can be particularly dangerous for older Americans. This credential sounds legitimate, but often it is little more than a way to manipulate investors by building false trust.
Don't get me wrong. There are many organizations that have very strict criteria that must be met before handing out credentials. However, there are just as many illegitimate ones. Sadly, many investors cannot tell the difference.
In a recent report, Richard Cordray stated,
These designations imply special training and experience in providing financial advice to seniors. The Office for Older Americans heard frequently from industry representatives, state and federal regulators, and consumer organizations that older consumers may be confused or misled by financial advisers touting senior designations.
The full report was 62 pages long and was intended to inform congress on the misleading and confusing claims made particularly by senior specialist certifying agencies. Not only are many of these designations extremely easy to get, many of them sound almost identical to other, more legitimate, certifications.
According to the Consumer Financial Protection Bureau, some of these designations even offer free lunches and seminars to lure people, many of them seniors, into investment scams. In response to these extremely confusing designations, FINRA and other investment industry regulating agencies have limited the use of these acronyms and titles.
Before you invest, it is a good idea to do your research and check out the adviser's qualifications.
Watch the video below to hear Attorney Courtney Werning explain more about these credentials.