Financial Industry Regulator Issues Warning on Senior Designations

Thousands of financial advisors market themselves as trained to provide investment advice to seniors, using authoritative-sounding titles like "certified senior advisor" or "certified retirement counselor."  But often these designations are nothing more than what are called "weekend" designations, obtained by attending a hotel seminar, and some don't even require a high school or college diploma. (See "When Getting Financial Advice, Don't Be Fooled by Impressive-Sounding Credentials.")

The use of these misleading designations has become so widespread that now the brokerage industry's largest regulator has issued a warning regarding their use.  The group has also released the results of a survey of 157 of its member firms, revealing that most firms allow their advisors to use senior designations and that more than a quarter of these firms allow any designation at all.  For example, more than a third have advisors who are using the "certified senior advisor" designation, which involves little more than attending a three-and-a-half-day seminar and does not require a high school diploma.

“In certain instances, senior designations approved by firms or widely used by registered persons did not require rigorous qualification standards,” the Financial Industry Regulatory Authority Inc. (FINRA) dryly notes in its warning, Regulatory Notice 11-52. 

FINRA's survey found that 68 percent of firms allow the use of senior designations. A majority of firms (66 percent) that permit the use of senior designations require approval and verification of credentials before they are used, but 23 percent of firms require prior approval but do not verify the credentials. That leaves 11 percent of firms that do not require either approval or verification of credentials.

FINRA suggests that its member firms may want to put in place procedures that would permit their financial advisors to use only those senior designations "that instill substantive knowledge to better serve and protect senior investors."

Credentials like "certified senior adviser," "certified retirement counselor," "registered financial gerontologist," and "certified retirement financial adviser" imply expertise with senior and retirement investing, but they take only a few days to earn. Insurance companies often use graduates of these programs to sell insurance contracts to seniors--in particular deferred annuity contracts, which may not be in the best interest of the senior. 

If you are looking for qualified financial advice, look for a "certified financial planner," "chartered financial consultant," or a "master of science in financial services (MSFS)." These programs actually involve years of study and require a college degree. Other ways to make sure you are getting good advice is to ask for references. You should also check with the Better Business Bureau and the National Ethics Association to make sure there are no complaints filed against the advisor.