finra

Remarks by Mary L. Schapiro
Chief Executive Officer, FINRA

SEC's Third Annual Senior Summit Remarks
Washington, DC
September 22, 2008

 

Good afternoon, everyone, and thank you Commissioner Casey, and the entire Commission, for hosting this event and providing leadership on these issues.

 

These are unsettling times and there are a lot of important questions—about the health of the global economy and the future of our regulatory system—that will take much of our collective attention in the coming weeks and months.

 

But as we focus on systemic issues, we must not lose sight of our duty to the individual investors who depend on us for protection—and none more so than our seniors. 

 

Seniors need regulators to set and enforce high standards. But they rely even more on the firms we regulate, and the financial professionals that give them advice, to embody those standards of trust and excellence. 

 

FINRA takes the issue of protecting seniors very seriously. I am especially proud of our enforcement efforts in this regard and of the comprehensive program you heard about this morning from Gerri Walsh and Christine Kieffer to arm seniors with the tools they need to protect themselves. 

 

We are working closely with firms to make sure they understand this issue. Our message to firms is clear: treat seniors properly and educate your brokers how best to interact with this growing segment of the investor population because FINRA is watching. 

 

Yet, as we know, serving seniors well presents a range of challenges, made even more complicated by the fact that, of course, not all seniors are alike. 

 

They represent every segment of our society, with different financial and personal situations, different investment needs and different levels of sophistication and risk tolerance. So it isn't possible to talk about senior investors as a homogeneous group. 

 

At the same time, though, there are certain issues that many seniors face, to some degree or another, and it is important for all industries, including ours, to do their best to understand and address them. 

 

At last year's Senior Summit, we focused on abusive sales practices aimed at seniors. FINRA also published a Notice examining firms' regulatory obligations through a "senior-centric" lens. 

 

I would note that—while firms owe all their customers the same obligations and duties—age and life stage can be important factors, and firms must make sure that the procedures they have in place take these considerations into account. 

 

We are also highlighting other issues that we know firms are struggling with when it comes to some segments of the senior population, including working with customers who may be showing signs of diminished capacity, or what to do when a broker suspects an elderly customer is the victim of financial abuse by a caretaker, or even a family member. 

 

To further develop these themes, over the last year, staff from FINRA, NASAA and the SEC met with firms of all sizes, as well as with representatives from senior advocacy groups, to hear how they are addressing their regulatory obligations to seniors. The Joint Report on Protecting Senior Investors catalogs our findings. 

 

I believe it will prove to be a valuable resource to financial services professionals as they struggle with the range of issues associated with an aging customer base—and it is my belief that this report will help make the securities industry a leader among industries when it comes to developing guidelines to serve senior customers. 

 

Thank you again for convening this important meeting. I look forward to working with the SEC in the days ahead. 

 

I'd now like to introduce NASAA Executive Director, Russ Iucalano, who is filling in for newly-elected NASAA president, Fred Joseph, the Securities Commissioner from the State of Colorado, who could not be with us today. 

 

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The regulators’ joint report – Protecting Senior Investors: Compliance, Supervisory and Other Practices Used by Financial Services Firms in Serving Investors – provides practical examples of proactive steps being taken financial services firms in serving senior investors.