Regulators to Share Best Practices in Working with Senior Investors

The Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) said they will solicit input from “all interested parties’ identifying strong supervisory, compliance, and other practices used by financial services firms serving seniors.

The regulators will publish their findings on best practices in the following areas:

• marketing and advertising to seniors;
• account opening;
• product and account review;
• ongoing review of the relationship and appropriateness of products;
• discerning and meeting the changing needs of customers as they age;
• surveillance and compliance reviews; and
• training for firm employees.

According to an announcement about the initiative, the goal of the initiative is not to impose new regulatory requirements, but to help firms better meet their current obligations to, and more generally serve, clients who are seniors.

The current effort is part of a coordinated national initiative to protect seniors from investment fraud and sales of unsuitable securities launched in May 2006. The national initiative has several components, including targeted examinations, enforcement of the securities laws in cases of fraud against seniors, and active investor education and outreach.

FINRA last year launched a free, instructional webcast regarding compliance obligations advisers have when working with senior customers (see FINRA Webcast Offers Insights on Working with Seniors), one month after the group announced two major regulatory sweeps intended to ensure that securities firms adhere to appropriate sales practices when dealing with seniors and individuals nearing retirement (see FINRA to Check Securities Firms’ Sales Practices with Seniors).