The new federal agency that protects the financial interests of the nation’s consumers is urging tougher regulation of the professional designations that financial advisors use to market their services to seniors.
As ElderLawAnswers has previously reported, authoritative sounding titles like "certified senior advisor" or "certified retirement counselor" are often not what they seem. Thousands of financial advisors market themselves as trained to provide advice to seniors, using authoritative titles like "Certified Senior Advisor" or "Certified Retirement Counselor." Unlike a "Certified Financial Planner," which requires years of rigorous study, many of these titles only involve attending a seminar or taking a self-study course. Holders of these designations may not even be required to have a high school or college diploma.
In a report to Congress, the Consumer Financial Protection Bureau (CFPB) finds that more than 50 different senior designations are currently in use. This can cause confusion for consumers who don't know how to distinguish between the different designations, the report says. A chart listing coursework requirements for eight impressive-sounding titles notes that a "Certified Senior Advisor" needs only a three-day course and that coursework is optional for a "Certified Retirement Financial Advisor."
The CFPB, which was set up in the wake of the late 2000s recession and financial crisis to help shield consumers from the abuses of financial markets, offers several recommendations to Congress, the Securities and Exchange Commission and other policymakers, including:
- Establish a central tool through which seniors can verify a financial advisor's designations
- Create a mechanism to capture complaints against financial advisors who are misusing titles
- Require advisors who use a senior designation to provide disclosure about the designation to consumers
- Develop minimum standards for the training necessary to get a designation and minimum standards of conduct for anyone with a senior designation
- Increase the use of existing enforcement methods to penalize improper use of a senior designation.
To read the CFPB’s report, click here.
For coverage of the report in the Los Angeles Times, click here.