The North American Securities Administrators Association has released a model rule prohibiting misleading use of designations in the sale of investment products to senior investors. The measure prohibits the use of senior-oriented designations to mislead senior citizens or retirees. It also provides state securities administrators with the means to recognize the use of designations conferred by an accredited organization.
According to the NASAA measure, financial professionals must not use a senior certification or professional designation if they have not actually earned the designation or are otherwise ineligible to use it. Furthermore, financial professionals must not use a non-existing or self-conferred certification or professional designation or use a designation to indicate they have professional expertise that they, in fact, do not have.
The new rule also prohibits use of designations obtained from designating or certifying organizations that are primarily sales-training focused or that lack reasonable standards and procedures.
In addition to the new NASAA rule, a committee of the National Association of Insurance Commissioners recently approved the use of a bulletin reminding insurers that they are responsible for how their products are advertised, including how producers describe their designations to the public.
What “red flags” are affecting your business? Send your comments to the National Ethics Bureau at firstname.lastname@example.org.