Regulators and lawmakers are ramping up efforts to protect seniors in response to increasing levels of senior fraud. But rather than view these efforts as yet another regulatory burden, financial services companies should recognize opportunities to build stronger relationships with senior clients and leverage existing technologies and processes.
This advice comes from a new study entitled, ?? 1/2 Elder Abuse Regulations: Reporting Burden or New Opportunities for Financial Services,?? 1/2 published by the Tower Group, a Massachusetts-based financial services consulting firm. Although the study was produced for financial institutions, its core findings are relevant to financial advisors, who typically bear the brunt of regulatory scrutiny.
The study found that senior investment fraud is rising because older Americans have an increasing share of America?? 1/2 s investable assets. As a result, regulators are beginning to require that financial institutions take special steps to protect these consumers. For example, the study reports that 17 states now require employees of financial institutions to report suspected financial abuse of senior clients. There have also been widely reported crackdowns on the deceptive use of financial designations in the senior marketplace, as well as so-called “free lunch seminars.”
But rather than hunker down in the face of these initiatives, financial companies should take proactive steps to leverage the opportunities ahead. For example, they should:
- Position themselves as senior market leaders in providing superior protection as well as in managing and growing senior financial assets.
- Increase service quality in the senior marketplace, not by investing in new technology, but by leveraging existing anti-fraud and other compliance technologies.
- Step up anti-fraud training across the entire enterprise.
Now is the time for advisors to communicate their commitment to ethical sales practices in the senior market. They should also do their part to educate their clients about reducing fraud risk.