When Getting Financial Advice, Don't Be Fooled

A "certified senior advisor" may sound like a trustworthy person to provide investment advice to the elderly, but beware! While the title has an impressive ring to it, it doesn't take much to earn it. According to a July 8, 2007, article in the New York Times, many insurance companies are using sales agents with fancy-sounding credentials, but few actual qualifications, to sell annuities to seniors.

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, becoming a "certified senior advisor" involves attending a three-and-a-half-day seminar and then passing an easy multiple choice test. "Certified senior advisors" are not even required to have a high school or college diploma.

Insurance companies often use graduates of these programs to sell insurance contracts to seniorsin particular deferred annuity contracts, which may not be in the best interest of the senior. Unlike an immediate annuity, which begins paying money right away, a deferred annuity does not begin paying for a set number of years. While deferred annuities can be a good way for some wealthy seniors to pass money to their heirs, it is not a good product for seniors living off their savings because they may die before they receive the money. However, insurance sales agents often push deferred annuities because the products pay higher commissions.

According to the New York Times, the following credentials sound impressive, but actually take only a few days to earn:

  • certified senior adviser
  • certified retirement counselor
  • registered financial gerontologist
  • certified retirement financial adviser

If you are looking for qualified financial advice, look for a "certified financial planner," "chartered financial consultant, or a "master of science in financial services (MSFS)." These programs actually involve years of study and require a college degree. Other ways to make sure you are getting good advice is to ask for references. You should also check with the Better Business Bureau and the National Ethics Bureau to make sure there are no complaints filed against the advisor.