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Regulation and Compliance > Federal Regulation > FINRA

Seminars and credentials go under the microscope

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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.

Try to use good sense and professionalism when organizing, promoting and conducting your seminar. Make sure to find out what the rules are and make sure you continue to scrutinize your own work if it appears your compliance department has missed something. Marketing to persons 65 and older is complicated and I encourage you not to just “jump in” and do it because so and so “had so much success” and “can show you how!” Be careful. Remember, it is YOUR license on the line. A good place for information is at

Another area of concern among regulators is the use of designations and credentials. Designations that suggest an expertise in retirement planning or financial services for seniors, such as “Certified Senior Advisor,” “Senior Specialist,” or “Certified Financial Gerontologist” have become problematic. Seniors may be led to believe that these individuals are particularly qualified to assist seniors with their finances when this may not be true. Indeed, FINRA recently conducted an Investor Education Foundation-sponsored survey which found that a quarter of senior investors were told by an investment professional that the investment professional was specifically accredited to advise them on senior financial issues, and half of those investors were more likely to listen to the professional’s advice because of it. The training and education required for these designations (and some others) rarely addresses the mechanics of financial planning for seniors and can often lead to misleading presentations. Moreover, use of these designations conveys an expertise in senior retirement planning where such an expertise may not exist and can violate NASD Rules 2110 and 2210, NYSE Rule 472, and the anti-fraud provisions of the federal securities laws. Moreover, many states prohibit or restrict the use of such designations.

To help you understand professional designations, FINRA maintains a database of such designations and the qualifications, if any, that are needed to obtain them, with information again available on its Web site. Note that FINRA does not approve or endorse any professional designation.

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