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Carefully Check Credentials of  ‘Senior Specialists’

Seniors should carefully check the credentials of individuals holding themselves out as “senior specialists.”

Con artists use the promise of high commissions to lure brokers, insurance agents, investment advisers, accountants, and lawyers, some of them not licensed to sell securities, into offering investments they may know little about, such as variable or equity-indexed annuities, bogus limited partnerships or promissory notes.

Some of these individuals hold nothing more than a “designation” as “senior specialists” implying that they have expertise in assisting seniors in structuring their investments in such a manner as to reduce taxes, minimize risk and avoid state probate laws.

State regulators are concerned these individuals are misusing “senior specialist” designations to provide a false sense of security to their customers.

While there are organizations whose members complete rigorous programs of study and pass extensive examinations to earn “senior specialist” designations, there are other organizations that require little or no training to use one of these designations.

For this reason, senior investors should make sure they deal only with individuals, licensed by state securities regulators who license brokers and investment advisers after they pass rigorous competency examinations.

Individuals may call themselves “senior specialists” to create a false level of comfort among seniors by implying a certain level of training on issues important to the elderly. But the training they receive is often nothing more than marketing and selling techniques targeting the elderly. These sales people and the alphabet soup of letters after their names can be confusing, and in some cases, may even be deceptive to seniors.

NASAA’s Investment Adviser Operations Project Group has observed a significant increase in designations claiming to provide the holder with expertise in providing services to investors 55 years and older.

State securities regulators have opened a number of cases in recent years involving “senior specialists.” Most of the cases involve securities recommendations by individuals who are not properly licensed by state securities regulators.

Bogus senior specialists commonly target senior investors through seminars where the specialist reviews seniors’ assets, including securities portfolios. Typically, the specialist recommends liquidating securities positions and using the proceeds to purchase indexed or variable annuities products the specialist offer.

In many jurisdictions, these recommendations may be viewed as providing investment advice for compensation. In such cases, the senior specialist would be offering investment advice as an unregistered investment adviser and, therefore, be subject to enforcement action by regulatory agencies.

Before doing business with any investment professional, all investors, especially senior investors, should check with their state securities regulator to determine whether the individual is properly licensed and if there have been any complaints or disciplinary problems involving the individual or his or her firm.

To learn more about various professional designations, please visit the FINRA website and then click the link for “Professional Designations.”


NASAA has provided this information as a service to investors. It is neither a legal interpretation nor an indication of a policy position by NASAA or any of its members, the state and provincial securities regulators. If you have questions concerning the meaning or application of a particular state law or rule or regulation, or a NASAA model rule, statement of policy or other materials, please consult with an attorney who specializes in securities law.

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