FOR IMMEDIATE RELEASE
Wednesday, December 29, 2010
Contact: Laura Egerdal, (573) 526-0949
Carnahan Audits 30 Investment Firms to Uncover Risks for Senior Clients
Jefferson City, Missouri - Missouri Secretary of State Robin Carnahan today released the findings of her office’s statewide examination of the practices used by Missouri’s broker-dealer and investment adviser firms to protect their senior clients. Specific audit findings for individual firms are not public, but statewide trends suggest more should be done to address the unique investment challenges faced by aging clients. In the report, Carnahan makes specific recommendations to better protect Missouri’s 1.1 million seniors and their life savings.
The report released today, Protecting Seniors and Their Life Savings: Policies and Practices of Missouri’s Investment Firms, is based on audits of 30 Missouri-registered firms conducted by Carnahan’s Securities Division over a six-month period in 2010. The results reveal that most Missouri firms lack specific policies to address the unique challenges of working with seniors, such as identifying unsuitable investment products and coping with cognitive decline or dementia, which affect more than half of all seniors more than 80 years old. Overall, the examination found that there is a need for a more structured approach to senior issues.
“Every year, hundreds of seniors call my office with questions and complaints about the investment advice they receive,” Carnahan said. “Missouri seniors should be able to invest their life savings confidently and without fear they will be taken advantage of by their adviser or broker. I hope financial professionals across Missouri will use this report to better serve their aging clients.”
The report identifies practices that firms should consider to better serve seniors, such as:
(1) adopting a definition of “elderly” person that is practical and client specific;
(2) identifying certain investments (e.g., variable annuities), that trigger a heightened review by management when sold to a senior investor;
(3) prohibiting agents from targeting seniors in their advertising; and
(4) ensuring that account information for seniors is regularly reviewed and updated – in person.
The full report also includes specific steps that Carnahan’s Securities Division will take to ensure brokerage and investment adviser firms across the state protect their senior clients and comply with applicable laws and regulations. Although audit findings for individual firms are not public, investors may call the toll-free Investor Protection Hotline at 1-800-721-7996 to learn the history of any company or representative and ensure they are properly registered as required by law.
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To find out more about Missouri's Secretary of State's office, visit www.sos.mo.gov
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