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Senior Investors

FINRA views the protection of senior investors, as well as baby boomers who are retired or approaching retirement, as a top priority. Because a large number of American investors are approaching retirement and control a substantial portion of investment assets, FINRA encourages firms to review and, where warranted, enhance their policies, procedures and practices, in light of the special issues common to many senior investors.

For example, a firm's procedures and controls should take into consideration the age and life stage (whether pre-retired, semi-retired or retired) of their customers. Of particular concern to FINRA is the suitability of recommendations to senior investors, communications targeting older investors, and potentially abusive or unscrupulous sales practices or fraudulent activities targeting senior investors.

FINRA’s exams focus on a broad range of topics, including:

  • the types of securities and suitability of securities sold to senior investors
  • training of firm representatives with regard to senior specific issues and how firms address issues relating to aging (e.g., diminished capacity and elder financial abuse or exploitation);
  • use of senior designations
  • firms’ marketing and communications to senior investors
  • types of customer account information required to open accounts for senior investors
  • disclosures provided to senior investors
  • complaints filed by senior investors and the ways firms track those complaints
  • supervision of registered representatives as they interact with senior investors

Securities Helpline for Seniors

In 2015, FINRA launched the toll-free FINRA Securities Helpline for SeniorsTM to provide older investors with a supportive place to get assistance from knowledgeable FINRA staff related to concerns they have with their brokerage accounts and investments.

Senior investors can call FINRA's new toll-free FINRA Securities Helpline for Seniors (844-57-HELPS or 844-574-3577) from 9:00 a.m. – 5:00 p.m. ET, Monday through Friday, and get neutral, knowledgeable assistance with:

  • understanding how to review investment portfolios or account statements;
  • concerns about the handling of a brokerage account; and
  • investor tools and resources from FINRA, including BrokerCheck®.

The Report on the FINRA Securities Helpline for Seniors highlights important lessons for investors gleaned from calls and lays out effective practices for firms to consider when working with senior investors.  The FINRA Securities Helpline for Seniors has fielded more than 2,500 calls and helped investors recover nearly $750,000 in voluntary reimbursements from firms since its launch in April.

National Senior Investor Initiative

In 2013, FINRA and the SEC initiated an assessment of firms' policies and practices regarding their senior investor clients. This on-going effort focuses on suitability, disclosures, misrepresentation, advertising, pricing, compensation and supervision relating to recommended products and services.

The assessment also reviews firm’s written supervisory procedures to determine whether firms have placed adequate controls to identify potential financial abuse of senior investors or individuals with diminished mental capacity. We have found, among other things, that age plays a role in many firms' supervisory processes.

Download: The SEC / FINRA National Senior Investor Initiative Report

Senior Designations

In November 2011, FINRA issued Regulatory Notice 11-52 addressing the use of certifications and designations that imply expertise or specialty in advising senior investors (senior designations). The notice outlines findings from a survey of firms which focused on the prevalence of senior designation usage, the extent to which particular senior designations were used or prohibited, and the supervisory systems in place regarding senior designations. It also highlights practices used by firms regarding the use of senior designations. FINRA encourages firms to consider strengthening their supervisory procedures by implementing, as appropriate to their business, the sound practices outlined in this notice.

Use FINRA's Professional Designations tool to look up requirements to earn and maintain designations, including senior designations.

Sales Seminars

During 2006 and 2007, FINRA conducted a regulatory sweep, reviewing sales activities and other practices regarding "free lunch" seminars. FINRA collaborated with the SEC and the North American Securities Administrators Association (NASAA) and the New York Stock Exchange Member Regulation Inc. (now combined as FINRA) in completing this effort.

The results of these examinations led regulators to conclude that financial services firms should take steps to supervise sales seminars more closely, including reviewing and approving advertisements and sales materials for accuracy.

In addition, because seniors are pursued to attend sales seminars, firms should ensure that attendees understand that these are sales seminars intended to result in the sales of financial products. Seniors also should be informed that the seminars may be sponsored by another company with a financial interest in product sales.

Further, firms should ensure that the investment recommendations made during the sales seminars or during follow-up meetings are consistent with seniors' investment objectives and other financial interests. The report summarizing this effort was published in September of 2007.

Download: Protecting Senior Investors: Report of Examination of Securities Firms Providing "Free Lunch" Sales Seminars

FINRA Investor Education Foundation

Since its establishment in 2003, the FINRA Investor Education Foundation has played a central role in FINRA's senior investor education and outreach efforts. The FINRA Foundation employs national, state and grassroots partnerships to develop and distribute fraud prevention resources, conduct outreach, and train consumers, law enforcement professionals and victim advocates.

Since 2008, the FINRA Foundation has touched hundreds of thousands of consumers with essential fraud prevention messages, trained more than 900 law enforcement officers from over 400 agencies, developed and nationally distributed two public television documentaries, and equipped thousands more stakeholders to fight fraud in communities nationwide.

Moreover, the FINRA Foundation continues to engage in research to understand fraud prevalence, the mechanics and impact of investment fraud, if and why older consumers are more heavily victimized, and behavioral and neurological risk factors.

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FINRA Provides Guidance on Firm Responsibilities for Sales of Pension Income Stream Products
April 18, 2016
FINRA Requests Comment on Rules Relating to Financial Exploitation of Seniors and Other Vulnerable Adults
October 15, 2015
FINRA Reminds Firms of Their Obligations Regarding the Supervision of Registered Persons Using Senior Designations
November 11, 2011
FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers
September 10, 2007
Podcast
Part four of this six-part series covers sales practice priorities like senior investors and anti-money laundering.
July 21, 2015
Podcast
Part two of this two-part series presents guidance on supervising the use of senior designations to imply expertise with senior and retirement investing.
December 12, 2011
Podcast
Part one of a two-part series on the use of senior designations to imply expertise with senior and retirement investing.
November 28, 2011
Podcast
Mary Schapiro discusses one of FINRA's top priorities: protecting senior investors from fraud.
February 11, 2008
Podcast
This podcast discusses the sensitive issues of working with customers who show signs of diminishing mental capacity and responding to suspected financial abuse.
December 27, 2007
Podcast
This podcast examines how "free lunch" seminars are sometimes used to mislead senior investors-and how FINRA is responding.
December 10, 2007
Podcast
This podcast focuses on communications considerations that firms and representatives should keep in mind when working with senior customers.
November 26, 2007
Investor Alert
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Podcast
Investors frequently get invited to free seminars that promise to educate them about investing strategies or managing money in retirement—often with an expensive meal provided at no cost. But just because someone buys you breakfast, lunch or dinner doesn't mean you have to buy what they are saying—or selling.
Investor Education
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Investor Education
A toll-free number that senior investors can call to get assistance from FINRA or raise concerns about issues with brokerage accounts and investments.
Investor Alert
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Podcast
Selling your life insurance policy for cash might seem attractive, but life settlements can be costly if you're not careful. Research all your options before making up your mind. Listen to learn more.
Investor Education
In case you missed it, Senior Citizen's Day was August 21. Designated by President Ronald Reagan in 1988, the day offers a time to pay tribute to the many contributions seniors make to their communities, and to bring awareness to issues of particular importance to America’s older citizens. One of those issues is investor protection. The Financial Industry Regulatory Authority (FINRA) offers three helpful resources for seniors that they can use year round.
Investor Alert
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