We must credential seniors' investment advisors (Sen. Herb Kohl)

In these tough economic times, seniors are discovering that their life savings have lost so much value they may not be able fund their retirement.  Desperate for advice, they look toward investment advisors for strategies to ride out this economic storm.  More and more, individuals are representing themselves as certified “senior” investment specialists when they often have limited or no education and experience in extremely complicated financial matters.  It’s estimated that there are thousands of individuals holding themselves out as “senior” specialists.  Although some of them may have legitimate credentials, far too many do not.

Last Congress, the Senate Special Aging Committee conducted an investigation into so-called “senior investment advisors” and released our findings at a subsequent hearing.  Unfortunately, we learned that too many seniors are placing their trust in these bad actors, who in many cases are one step above scam artists, and often have an interest in steering seniors to certain complex financial products that are inappropriate for them.

We know that an attorney must go to school for three years and pass a state bar exam.  A CPA must have a college degree, an additional year of study, and must pass a national exam.  Neither can offer their professional services without those credentials.  Seniors should be able to trust the people who invest their money.  They should not be worried that the title after their advisor’s name is scarcely more than a marketing ploy. 

Our legislation would create a new grant program to assist states in their efforts to protect seniors from misleading financial advisor designations by encouraging them to adopt provisions outlined in the North American Securities Administrators Association’s and the National Association of Insurance Commissioners’ model rules on the use of senior designations.  I am happy to say that since our investigation, dozens of states have adopted rules to protect their residents.  But in these hard economic times, these states need financial assistance to help protect seniors from fraud, and this bill would provide it. 

Sen. Kohl is chairman of the Special Committee on Aging.