NASAA PODCAST SERIES: The Alert Investor EPISODE 4: “Talking to your Parents about Senior Investment Fraud” You’ve heard there’s no such thing as a free lunch… but con artists are claiming to offer just that….and their target... your aging parents. It all happens all the time at bogus free lunch seminars springing up across North America… con artists going after your parents… playing on their fears and leaving them with nothing but empty promises and broken dreams. So, how can you talk to your parents about avoiding this kind of financial fraud? More today in the Alert Investor… brought to you by NASAA …the voice of state and provincial securities regulators. You don’t need a news bulletin to tell you that your parents may have taught you everything you know…but in their golden years you may be able to teach them something when it comes to protecting them against senior investment fraud. You should really know who’s behind that door…talking to your parents on the phone or on the street…or at lunch. The rising tide of seniors has spawned a new cottage industry honing in on your mom and dad…. Salesmen and sometimes outright con artists masquerading as financial specialists with dubious designations…Marketing seminars offering sure-fire sales pitches to target seniors… often teaching how to pitch high-commission investments that are unsuitable given a senior’s health or financial snapshot. Some seniors are swindled at heavily advertised free lunch or dinner seminars… and while there’s no check for the meal…there’s also **no disclaimer** that these so-called senior specialists aren’t licensed to give advice or even sell securities. NASAA President Joe Borg: "There are predators out there who will steal that nest egg and leave your parents high and dry … and you could be responsible if you don’t help inform and educate them of what’s out there. Don’t let fear of running out of money, don’t let fear that the grand children will won’t be taken care of… don’t let fear rule how they make their investments." So how do you bring up the delicate subject of your parents’ financial future? First break the ice by bringing up your own financial concerns… even listen to a program like this together. Establish a consistent dialogue…take the time to sit down and emphasize your concern that they have the information they need, to make informed decisions about their future. Once you’re talking… conversationally review the 5 W’s… that’s the: who, what, when, where and why….you may be surprised what you both discover! 1) Who: Who are they talking to? Who’s giving them financial advice? Offer to review financial statements together. Is there some one new in their life that seems to be spending a lot of time with them? 2) Where: Do they have multiple accounts all over town or do they have their money in just one location? What is the best avenue to meet their needs? 3) What: Is the information they’re getting accurate? And are the products they’ve invested in suitable for their needs? 4) When: Candidly discuss their future. We’re all living longer so your parents need to consider investments that are suitable for their long-term retirement needs. Many popular products such as variable annuities garner high commissions for brokers who sell them…information that often gets lost in the fine print of all those forms. 5) Why: Discuss why your parents may think a particular investment or salesperson are their best options. It’s critical to *verify before you buy.* • Underscore their broker or adviser needs to be properly licensed by the state, and the products they’re selling must also be registered. Just having a designation doesn’t authorize someone to buy or sell securities or give investment advice. • Highlight the fact that not everyone has your parent’s best interest at heart when giving them that advice. Because of their sizeable savings, seniors are often targeted by scammers… they’re usually home during the day and their names could circulate on marketing lists. That means your parents could be repeatedly targeted by phone, mail or even in person by people out to confuse them, garner their trust and get their money. (Joseph Borg/NASAA President) "When you sit down with your parents you aren’t there to direct, you are not there to control, you are there to inform and educate. Give them the news: there are people out there who will try to scam them out of their life savings. They may be nice, they may talk to them on the phone, and they’ll cajole them. But your parents need to talk to you and you need to talk to them about this sensitive subject. In the long it will save them their nest egg and save you a lot of heartbreak." For more tips on how to prevent your parents from getting ripped off and how to become a more informed investor check out our Senior Investor Resource Center on our website at www.nasaa.org. NASAA…. Because every investor deserves protection.