Note: FINRA’s Regulatory Notice 07-43 echoes a series of complaints and issues in the securities sales area that were addressed in California in Senate Bill 620 with respect to the sale of life insurance, including annuities, to seniors. A leading source of complaints regarding senior investors continues to be inaccurate, false, or misleading statements in communications disseminated to persons over the age of 65.
High-pressure sales seminars aimed at seniors
The use of “free lunch” seminars that use high-pressure sales tactics continues to be a concern to securities and insurance regulators. Just last month a client of mine sent me a copy of a mailed invitation which was sent to her from an investment group out of Florida, who came to Northern California and stopped in several locations over a three-day period offering free meals at Ruth’s Chris Steakhouse.
The presentation itself was high pressure; the speaker made it sound like the products discussed were suitable for all persons in attendance. He made statements that were inaccurate and exaggerated regarding the safety, liquidity and expected returns of the investment strategies being touted. Additionally, the broker said to all the seniors in attendance that “they had to sign up today,” and made a point of making the attendees feel uncomfortable if they didn’t.
All of you out there have a duty to make sure you submit your advertisements and seminar materials to your compliance department prior to use with the public. If you are an independent agent and do not have a compliance department, I recommend that you submit the materials to the compliance department of the insurer you write business for. In California, current law requires that all advertisements be approved in writing.