The Consumer Financial Protection Bureau says financial advisers marketing themselves as specialists in serving seniors may be causing more confusion than clarity for consumers.
Financial advisers often advertise "senior" designations to imply to consumers that they have advanced training or expertise in the financial needs of older people. But a report released Thursday shows that these designations are not always a clear indicator of experience and are confusing for consumers.
The CFPB found that there are more than 50 different senior designations in use to sell a variety of products, including securities, financial products and insurance products like annuities and long-term care insurance.
The professionals who typically acquire these designations include investment advisers, broker dealers, accountants, insurance agents, financial planners and other general financial professionals.
The titles and acronyms for the different designations are often similar or nearly identical to other designations, making it difficult for consumers to distinguish one from the next.
For example, the report pointed out, Certified Estate Planners (CEP), Chartered Estate Planning Practitioners (CEPP) and Certified Estate and Trust Specialists (CES) are different designations conferred by different organizations, with different training requirements. But the similarity of these titles may lead consumers to believe each possess similar qualifications and expertise.
In addition to confusing consumers, some of these specialists also appear to be exploiting seniors as well.
The group said that various regulators and consumer groups have been reporting in recent years that some financial advisers with senior designations are targeting older consumers and selling them inappropriate and sometimes fraudulent financial products and services.
CFPB said that while people 60 and older make up 15 percent of the population, they account for about 30 percent of investment fraud victims.
The group is urging Congress and the U.S. Securities and Exchange Commission to look closer improving the clarity of "senior designation" titles that financial advisers use to market their services, as well as beefing up regulation of these industries.
CFPB is also suggesting that a centralized tool be created for consumers to research and verify senior designations and that the SEC track related complaints.
It also wants to require that those individuals holding senior designations and certifications meet and maintain minimum levels of professional standards, including education and accreditation, as well as a code of conduct.
"These recommendations mark an important step toward addressing the proliferation of designations, certifications and titles used to mislead, confuse and deceive America's seniors," Kevin Keller, CFP Board's CEO, said in a statement."