A considerable number of Americans rely upon financial advisers in an effort to get a better handle on their fiscal situations, but unfortunately, older consumers may be particularly at risk for difficulties in dealing with these professionals.
Older Americans are already considered by the government to be at high risk for deception and fraud when dealing with their finances, meaning that the more than 50 designations used by many advisers nationwide can further add to the difficulties they may face in finding the kind of services they may want or need, according to a report from the Consumer Financial Protection Bureau.
Often, the more than 50 million senior citizens nationwide could run into difficulties because of the names these advisers have, the various types of training each one necessitates, and moreover a general lack of proper oversight for the entire industry.
“With such a bewildering array of titles and acronyms, it is no wonder that older Americans are confused and misled by these titles,” said CFPB Director Richard Cordray. “Today’s report underscores the need for consistent high-level standards of training and conduct for those advisers who want to acquire a bona fide senior designation.”
The reason this is important is that in general, seniors tend to have larger amounts of household wealth than younger people, usually saved up in retirement accounts and the like, the report said. Criminals may target them in hopes of having an easier time getting away with their crimes, as older people may also be less vigilant about checking on what their potential adviser is doing.
To this end, the CFPB is recommending that more rigorous training standards for financial advisers be put into place, and that those professionals be required to follow more rigorous standards of conduct, the report said. Finally, it wants to see state and federal regulators do more to increase supervision and enforcement efforts for these workers so that they can better protect consumers from potentially misleading or otherwise harmful services.
The CFPB has endeavored for some time now to expand regulatory oversight in an effort to better protect consumers from deceptive or unfair practices in many areas related to their finances, including those from both bank and nonbank institutions. It also recently created a database of many of the consumer complaints it receives.