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Stewardship Standards

Vincent explores the debate of Industry Standards, Duties, Best Practices and Regulatory Trends

The views and opinions expressed in this blog are those of Vincent Micciche and do not necessarily reflect those of LifeMark Securities









Providing Financial Services to Seniors: Are Firms Doing Enough?

Providing Financial Services to Seniors: Are Firms Doing Enough?

Serving seniors may be the most important challenge and most rewarding opportunity facing today’s financial advisor.

The “Baby Boomers,” those born between 1946 and 1964, began turning 65 in 2011. According to the most recent U.S. Census Bureau data, over 41 million people living in the United States, or more than 13% of the population, were 65 or older in 2011. The number of seniors living in the United States will increase dramatically in the future. For example, the number of people aged 65 or older is projected to be more than 79 million in 2040, which is over twice as many as in the year 2000

Recent surveys of wealth distribution in the U.S. reveal that individuals 65 and older control 33.2% of total personal wealth. Those ages 55 – 64 control another 31.2%

Regulators, the medical community and the legal community recognize seniors as a population of individuals that are uniquely vulnerable to fraud, abuse and financial exploitation. According to the National Adult Protective Services Association, “financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for his/her own personal benefit.”

The elderly are being scammed to the tune of $2.9 billion a year, according to a 2010 survey from the Metropolitan Life Insurance Co. But that figure, which is based on publicly reported cases, is actually much higher, according to experts.

FINRA, the primary regulator in the financial services industry, and the SEC performed a joint study and recently released a report called National Senior Investor Initiative.

Taking from the many recommendations in the study, firms like Lifemark Securities Corp., www.lifemark.com have adopted industry leading actions to improve their advisors abilities to serve this important population.

4 Things That All Firms Can Do Now

Advanced Training for Advisors
Provide advanced training materials and tools for advisors working with seniors. The goal is to improve the advisors ability to identify signs of diminished capacity, exploitation and abuse.

Resources for seniors
Provide educational resources for seniors on their public websites. This need to include alerts and advisories from regulators, lists of organizations that serve seniors and their resources, publications of organizations like the American Association of Retired People (AARP) and the National Adult Protection Services Association (NAPSA)

Alternate Contacts
Modify customer and account information to include a request for an alternate contact that may be called if the advisor cannot reach the customer or has concerns about the possibility of diminished capacity or exploitation.

Adopt Senior Specific Policies
Firm’s should encourage an atmosphere of increased awareness of these issues and promote an ongoing discussion of “Best Practices”. In addition, their policies should specifically call for escalation by the advisor should any concerns materialize.

In summary, the industry needs to see older adults as a segment of the population with unique needs and circumstances. In addition to recognizing the duty of care owed its customers, in the instance of older adults, it needs to also think about its duty of competency. Accordingly, it’s necessary to increase the awareness and training of all its’ personnel on senior specific issues.

"Caring for our seniors is perhaps the greatest responsibility we have. Those who walked before us have given so much and made possible the life we all enjoy."

John Hoeven

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