The Consumer Financial Protection Bureau (CFPB) published a report highlighting problems with so-called “senior designation” credentials that many financial advisers use to market their services to older Americans. The Bureau found that there are more than 50 different senior designations that financial advisers use to indicate that they have advanced training or expertise in the financial needs of older consumers. These designations can confuse older consumers, who are already at risk for deception and fraud. “With such a bewildering array of titles and acronyms, it is no wonder that older Americans are confused and misled by these titles,” said CFPB Director Richard Cordray. “Today’s report underscores the need for consistent high-level standards of training and conduct for those advisers who want to acquire a bona fide senior designation.” Today’s report highlights the challenges that the nation’s 50 million seniors face in navigating the complex world of financial advice and services. Older consumers have unique vulnerabilities, and are often the targets of fraud. The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the CFPB’s Office of Financial Protection for Older Americans (Office for Older Americans) to make recommendations to help older consumers identify the most appropriate financial adviser and verify a financial adviser’s credentials. The report, entitled “Senior Designations for Financial Advisers: Reducing Consumer Confusion and Risks,” includes recommendations to Congress and the U.S. Securities and Exchange Commission. Because many financial advisers holding senior designations are regulated by state securities and insurance regulators, the Bureau offers recommendations for their consideration as well. The report found that: ► The names and acronyms of senior designations confuse consumers. Titles and acronyms for the numerous designations can appear quite similar, and consumers have no simple, clear means to distinguish among these designations. Similar sounding designations can have very different requirements for earning the designation. ► There is a wide variety of required training, qualifying exams, and oversight associated with different designations. Some senior designations may require rigorous college-level coursework while others may be acquired by attending a weekend seminar. ► There is a lack of comprehensive supervision and enforcement. No single authority is responsible for ensuring that those who use senior designations do not mislead or harm consumers. Older consumers can be attractive targets for the marketing of various financial products. They often have higher household wealth in the form of retirement savings, inheritance, accumulated home equity, or other assets. They are also more likely to experience cognitive decline, which can impair their capacity to manage their finances. For example, a particular problem associated with senior designations is the participation of some designees in “free lunch seminars.” These events are often marketed as educational seminars, when in fact they are staged sales events to sell investment and other financial products. A study conducted by the Financial Industry Regulatory Authority showed that older consumers are more likely to rely on the advice of a professional who uses a senior designation. With more than 50 designations, consumers risk paying for an adviser they believe has a breadth of experience, but who, in reality, simply paid a website for multiple designations. Today’s report was informed by a Request for Information on senior financial exploitation that the Bureau issued in June 2012. The Bureau conducted extensive outreach to outside stakeholders, and, in addition, held roundtable listening sessions on the topic of senior designations in late 2012. The report was informed by financial planners, insurance and securities professionals, consumer advocates, social workers, and other industry stakeholders. Based on its findings, the Bureau’s recommendations include: ► Implementing rigorous training standards to obtain senior designations: The Bureau recommends that state and federal regulators implement rigorous criteria for acquiring senior designations, including specific standards for education, training, and accreditation. ► Setting strict standards of conduct for those using senior designations: The Bureau recommends that state and federal regulators set consistent and strict standards of conduct for those using senior designations. Such standards could include prohibiting senior designees from characterizing sales events as educational seminars, and selling financial products and services at events that are advertised or described as educational or informational events. ► Increasing supervision and enforcement: The Bureau recommends that federal and state regulators consider increasing existing supervision of and enforcement authority against misleading conduct by a holder of a senior designation. The Bureau believes that adoption of these recommendations will help older consumers avoid financial advisers who would misuse their designations to sell inappropriate investment and financial products. The Bureau’s Office for Older Americans conducts research and educational efforts in order to provide seniors the information they need to make safe and responsible financial decisions. Following the report’s release today, the Office for Older Americans will work with federal and state regulators and offer assistance in developing a tool to help consumers verify the credentials of financial advisers who market their services and products to older adults.