Without fiduciary protections, Texas Tech professor Michael Finke sees a “predatory financial services industry” that feeds on the elderly as a stark reality.
During a presentation on Thursday at CFA Institute’s Wealth Management 2015 conference in New Orleans – also webcast online – Finke discussed planning for retirement living and some of the financial implications of aging.
“In the United States, we have a buyer-beware marketplace for products that are very often sold to older consumers,” said Finke, professor and director of retirement planning and living in the personal financial planning department at Texas Tech University and a contributing editor to Research magazine, which is affiliated with ThinkAdvisor.
“This is insane,” he continued. “It’s insane that we allow people to sell products that are not necessarily in the best interest and hold themselves out as experts in the financial services industry to people who in their 80s and 90s without any fear that they are going to get sued.”
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Finke called for change, speaking passionately to the crowd at the chartered financial analyst gathering.
“One of the things that we need to do is protect those who are really least able to monitor those in the financial services industry and decide what is and what isn’t an appropriate product,” he said. “We need to take that burden off their shoulders; otherwise we’re going to end up with a predatory financial services industry that essentially caters to those who are older.”
Finke believes the market would be better served “by having some sort of fiduciary protections,” especially for older consumers.
“I don’t think you can have a buyer beware marketplace and end up with good outcomes, especially when people are in later life, you know that they are going to experience cognitive limitations,” Finke said.
Finke presented some startling facts during his presentation regarding dementia and cognitive impairment among retirees — and called on advisors to make planning for cognitive and physical changes in old age a part of retirement planning.