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Compliance August 16, 2010
Regulators Update Best Practices About Serving Senior Investors
The Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and North American Securities Administrators Association (NASAA) have outlined practices used by financial services firms to strengthen their policies and procedures for serving senior investors.
Reported by Alison Cooke Mintzer
The regulators updated a joint report, first published in 2008, intended to assist the overall industry in enhancing compliance, supervisory and other practices related to older investors.
The 2010 Addendum summarizes additional practices now being used by financial services firms and securities professionals in serving senior investors. It 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.
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.”