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Broker-Dealers and Baby Boomers: New Report Focuses on Senior Investors

May 4, 2015
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By Oren Bossin and Megan Garufi
As more baby boomers are reaching retirement age in an environment where conservative investments are earning historically low yields, a new report has been released providing further guidance for the upcoming year. The focus? Whether broker-dealers are recommending or offering other riskier investment choices that could provide higher yields.

The National Senior Investor Initiative Report comes on the heels of a January release of examination priorities from the SEC. This new report – a collaboration between the SEC and FINRA – outlines the risks and regulatory requirements associated with the upcoming examination focus, as well as findings from its most recent examinations.
 
Here are some highlights from the report:

  1. Securities Purchased by Senior Investors
    • Senior investors need to be fully informed of features, potential risks, and returns, for any securities they are purchasing
  2. Use of Senior Designations
    • Firms allowing use of senior designations should have safeguards in place against possible misuse of those designations
  3. Account Documentation
    • Customer account information should be furnished to customers within 30 days of opening an account and at least every 36 months thereafter
  4. Suitability
    • Investments in non-traditional investments should be supported by documentation to show customer awareness of knowledge of the risks specific to those investments
  5. Disclosures
    • Firms should be aware of the necessary disclosure requirements (to customers) for special products

 The full report can be found here.