“Financial Self-Defense for Seniors” Describes “Red Flags” and Tips For Avoiding Scams
Older Americans are too often victims of financial fraud and abuse. Recognizing this unfortunate trend, Certified Financial Planner Board of Standards, Inc. today released a free guide, Financial Self-Defense for Seniors, which is informed by recent survey data on senior financial exploitation, to help older Americans and their families identify the warning signs of financial abuse and to better protect themselves and their loved ones.
“CFP Board remains deeply concerned about incidents of consumers – particularly senior citizens – being misled by those claiming to be trusted financial professionals,” said CFP Board CEO Kevin R. Keller, CAE. “This guide to financial self-defense will help protect seniors from abusive, fraudulent and unethical financial practices.”
Financial Self-Defense for Seniors was written by CFP Board Consumer Advocate Eleanor Blayney, CFP®. It describes 10 “Red Flags” – common situations in which older Americans are vulnerable to financial abuse – and provides warning signs of financial abuse; real-life situations in which seniors are often taken advantage of; and advice for guarding against such abuse.
The 10 fundamental tips for seniors confronting typical “Red Flags” include:
- Look beyond the letters after a financial adviser’s name.
- If you don’t understand what’s being sold, don’t buy it.
- There’s no such thing as a free lunch.
- Just because a so-called expert recommends it, doesn’t mean it is right for you.
- If it sounds too good to be true, it’s probably not legitimate or safe.
- Don’t confuse familiarity with trust.
- The final sign-off should always be yours.
- Make sure the money others are making isn’t yours.
- Get the full story: who gains the most – you or the financial professional?
- You have rights as a homeowner. Know them.
The guide draws upon CFP Board’s 2012 Senior Financial Exploitation Survey of more than 2,600 CFP® professionals, which found that more than half had personally worked with an older client who had been subject to unfair, deceptive or abusive financial practices in the delivery of financial advice or the sale of financial products. Participating CFP® professionals estimated that only five percent of senior citizens actually report such financial abuse.
The survey also found that CFP® professionals were aware of a variety of abusive practices in the delivery of financial advice or the sale of financial products, including some practices that could violate state and federal regulations:
- Nearly three-quarters (73%) were aware of older investors who have been invited to “free meal” seminars that were actually sales pitches;
- 58% were aware of older investors who have received unsolicited pitches for financial products or services;
- Nearly three-quarters (74%) of CFP® professionals were aware of older investors who have been offered unsuitable financial products; and
- 58% were aware of older investors who have been subject to omission of material facts about financial products.
“CFP Board wants to shine a bright light on those who seek to abuse older Americans so that all seniors and their families can defend themselves against scammers,” Blayney said. “Seniors have contributed so much to our families, communities and our country. We owe them our thanks, but also our protection, so that they may live out their remaining years in financial security.”
Financial Self-Defense for Seniors is part of CFP Board’s series of financial self-defense guides, including the Consumer Guide to Financial Self-Defense, released in 2010. The U.S. General Services Administration’s (GSA) will include the guide in its Fall 2013 Consumer Information Catalog. The public can access an online version by visiting www.cfp.net/financial-self-defense-for-seniors or requesting a hard copy by sending an email to mail@CFPBoard.org or calling 800-487-1497.
ABOUT CFP BOARD
The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. CFP Board currently authorizes more than 67,000 individuals to use these marks in the U.S.
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