Oversight sought for financial advisers to elderly
The federal consumer watchdog Thursday called for tougher oversight of the credentials that financial advisers use to show they are trained to work with older Americans.
The Consumer Financial Protection Bureau said these financial advisers use more than 50 credentials, some of which they can simply buy online.
The confusing array of titles leaves older Americans vulnerable to abuse, the bureau's report said.
It noted that it is often impossible to distinguish between the titles, which do not clearly indicate what training advisers received and which are not overseen by a single regulator.
"A senior choosing between an Accredited Retirement Advisor and an Accredited Estate Planner will likely do so without knowing which one is required to have five years of experience and some graduate level education and which is not," CFPB director Richard Cordray said.
The report calls for state and federal regulators to require tougher training before people can obtain designations to work with seniors and to set standards of conduct for advisers who claim those certifications.
Congress created the consumer bureau as part of the 2010 Dodd-Frank law and gave it oversight of products such as mortgages, student loans and credit cards.
Through its office of older Americans, the bureau has been looking at the problems retired people face in managing their finances.
As part of Dodd-Frank, Congress told the CFPB to look into special titles that identify financial professionals as having expertise or training to work with older people.
A patchwork of regulation means there aren't uniform requirements for people who work with seniors, CFPB officials said.
Cordray said seniors and people with elderly parents need more transparency. He said his own father is 95 years old: "He should not have to fend off unscrupulous advisers who are trying to raid the life savings of seniors."