A recent article in Financial Planning Magazine detailed the red flags that regulators look for to catch and prevent financial abuse of seniors. Here they are, summarized by me:
- Taking too much risk with the senior client's money & income.
- "Churning" the account, that is, excessive trading for the purpose of generating fees and commissions.
- Exaggerating benefits and/or falsely minimizing risks
- Failure to disclose fees. I would also add, failure to justify them.
- Offering "forbidden" inappropriately risky, expensive or complex products to older clients. Elder law attorney Carolyn Rosenblatt mentions non-traded Real Estate Investment Trusts (REITs) and variable annuities.
- Failure to include- or even consider -family members in recommendations
In my experience, the worst offenses I've come across with new clients are all of the above.
Your Constructive Comments are Welcome!