Securities Regulators Publish Updated Best Practices for Firms Serving Seniors

As reported on, August 13, 2010.

The Securities and Exchange Commission, Financial Industry Regulatory Authority (FINRA) and North American Securities Administrators Association (NASAA) today updated a joint report that outlines practices being used by financial services firms to strengthen their policies and procedures for serving senior investors as they approach and begin retirement.

The SEC, FINRA and NASAA first published the report in 2008 to highlight proactive steps being taken by some financial services firms in serving senior customers. It was intended to assist the overall industry in enhancing compliance, supervisory and other practices related to older investors. The 2010 Addendum being released today summarizes additional practices now being used by financial services firms and securities professionals in serving senior investors.

Nearly 40 million Americans are 65 or older, and this number is expected to more than double to 89 million by 2050. As a result of the economic downturn, many older investors find themselves with smaller nest eggs than they anticipated. Estimates show that total retirement assets decreased by $4.5 trillion (25 percent) from 2007 to the first quarter of 2009. In light of these demographic trends, securities regulators continue to view the protection of senior investors as a top priority.

Carlo di Florio, Director of the SEC’s Office of Compliance Inspections and Examinations, said, “Securities regulators are focused on ensuring a fair market for seniors where sales practices are responsible, the facts are clear, and products are suitable. This report helps firms understand increasing regulatory expectations and effective industry practices that better protect senior investors.”

NASAA President Denise Voigt Crawford said, “Securities regulators continue to bring solid enforcement cases to protect our seniors from investment fraud and abuse. Strong regulation coupled with effective industry compliance, supervision and innovative senior-specific practices are essential toward ensuring that our growing population of senior investors is being treated fairly and responsibly by the financial services industry.”

Susan Axelrod, FINRA Executive Vice President and head of Sales Practice, said, “Securities regulators are working to ensure that retiring baby boomers are properly served and protected. For that reason, we continue to encourage firms to adopt practices that result in the fair treatment of senior investors.”

The 2010 Addendum focuses on the following categories when describing the latest practices being used by firms and securities professionals when serving senior investors:

  • Communicating effectively with senior investors.
  • Training and educating firm employees on senior-specific issues.
  • Establishing an internal process for escalating issues and taking next steps.
  • Obtaining information at account opening.
  • Ensuring appropriateness of investments.
  • Conducting senior-focused supervision, surveillance and compliance reviews.

Securities regulators are sharing this updated information as useful suggestions for other securities firms and professionals to ensure that they serve senior investors in an ethical, respectful and informed manner. Financial services firms are urged to continue developing practices that will help them to better serve their senior customers.

If you (or someone you know) are a senior investor and have concerns about your investments or other securities matter, please contact the Law Offices of Mitchell S. Ostwald at 916.388.5100 or email us at