State and federal regulators should require financial advisers to give clients information to verify their credentials for advising senior citizens, the U.S. Consumer Financial Protection Bureau said today.
Many financial advisers market their services to older Americans by touting one of more than 50 different “senior designations” that they obtained through some sort of training, the agency said in a new report.
“The designations can be earned from places as varied as a three-hour online course offered by a for-profit company to a two-year graduate degree from an esteemed university,” Richard Cordray, the agency’s director, said in an e-mailed statement. “Our research found that the training and standards required to attain these credentials varies enormously.”
In the report, the CFPB suggested that the Securities and Exchange Commission establish a “centralized tool” that would let people verify an adviser’s designation. It also said Congress and the SEC could require advisers to disclose information that would let clients verify their credentials.
State regulators may want to establish minimum standards for acquiring a senior designation and codes of conduct for those who hold them, the CFPB said in the report.
Such rules are important for senior investors, according to the report, because they are less able than others to absorb losses to their retirement savings.
“The vast majority of older consumers cannot afford to suffer the financial losses that can result from inappropriate products or services, or worse, fraud or exploitation,” the the CFPB said in the report.