Watch Out for 'Senior Specialist' Financial Advisers

Some designations sound impressive, but a government report finds huge discrepancies in training and oversight

by Caroline Mayer • Next Avenue
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Photograph: Shutterstock.com

Would you and your parents know the difference between an Accredited Retirement Adviser and an Accredited Estate Planner? How about a Retired Income Specialist versus a Certified Senior Advisor?

I suspect not (I’ve provided the answers at the bottom of this story) and, sadly, there’s a good reason why:

More Than 50 Confusing Titles

According to a new, damning report from the federal Consumer Financial Protection Bureau, financial advisers are using more than 50 “senior” titles or designations to suggest they have expertise helping older Americans with their investments. In reality, the credentials just mislead potential customers.

“Consumers risk paying for an adviser they believe has a breadth of experience, but who, in reality, simply paid a website for multiple designations,” the report says.

(MORE: Beware of Financial Advisers With Bogus Credentials)

And yet, a study conducted by the Financial Industry Regulatory Authority, the largest independent regulator for U.S. securities firms, found that older consumers are more likely to rely on the advice of a pro who uses an alphabet-soup senior designation, like Certified Senior Advisor (CSA) or Chartered Senior Financial Planner (CSFP).

Requirements for Credentials Vary Enormously

Trouble is, many of these similar-sounding titles have few, if any, requirements — and oversight of the designations is scattershot.

The Consumer Financial Protection Bureau’s assistant director for the Office of Older Americans, Hubert “Skip” Humphrey III (a former Minnesota state attorney general and the son of former Vice President Hubert H. Humphrey), says in the agency's blog: “Some of these titles require in-depth training, while others aren’t much more than window dressing.”

In short, many “senior specialists” or “retirement advisers” may not be qualified to help you or your parents manage the family’s money but may be quite eager to use their lofty titles as marketing ploys to lure clients.

The bureau’s findings are particularly troubling because study after study has shown that older Americans are attractive targets for investment fraud. People 60 and older make up 15 percent of the population, but account for an estimated 30 percent of investment fraud victims, according to AARP.

(MORE: How to Find a Financial Adviser Who's Right For You)

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Next: 9 Financial Adviser Pick-Up Lines to Watch Out For

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