Products September 23, 2022

Transamerica, Smart, and Finhabits Expand Retirement Plan Coverage to Underserved Markets

The service is meant to be an affordable alternative to state-mandated retirement plans.

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Finhabits, a U.S. fintech provider “by Latinos for Latinos” is partnering with Transamerica and Smart on a new small business 401(k) solution.

The program is designed to offer small businesses and their workers a simple, bilingual, and affordable alternative to state-mandated retirement plans in California and other states.

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The Finhabits group plan solution brings together multiple providers:

  • Transamerica will serve as the program’s recordkeeper.
  • Smart will serve as the program’s lead fiduciary and plan administrator.
  • TAG Resources, LLC a wholly owned subsidiary of Transamerica, will act as the plan’s third-party administrator and 3(16) plan administrator fiduciary.
  • Finhabits Advisors, LLC will serve as the program’s 3(38) investment fiduciary.

The plan emphasizes digital connectivity. Employers will be able to start a 401(k) plan directly in the Finhabits app, and plan implementation is fully electronic.

Participants will have access to Transamerica’s website in Spanish and English and Transamerica will offer call center representatives that are fluent in Spanish. The website’s features include resources to participants to take control of their retirement planning, access educational materials to make informed decisions, and initiate transactions, such as contribution increases or distribution requests.

Compliance September 23, 2022

New Advisory Group on Preventing Senior Scams to Meet Next Week

The advisory group was established by the Stop Senior Scams Act, passed in March, and is charged with developing strategies for combating financial scams against seniors.

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The Scams Against Older Adults Advisory Group, under the direction of the Federal Trade Commission, is scheduled to have its first meeting on September 29 at 2:30 p.m., and will be livestreamed on the FTC’s website.

The Stop Senior Scams Act, passed in March, established the group, which includes representatives of various advocacy groups such as AARP and AmeriCorps, and government institutions such as the Departments of Justice and Treasury.

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The group is charged with expanding consumer education, improving industry training, identifying new technology to prevent scams and developing research on fraud prevention for financial advisers.

A Senate Aging Committee hearing held Thursday announced the group’s upcoming schedule and also emphasized seniors’ unique vulnerability to financial crime.

Professor Marti of the University of Minnesota testified at the hearing that seniors’ heightened vulnerability to fraud is largely because seniors are more socially isolated than younger people and therefore have fewer people who can alert them to a scam, and often have fewer technical skills and suffer from cognitive decline as they age.

The SEC recommends that financial firms train their employees on the signs of cognitive decline in older clients.

DeLiema also noted that seniors tend to lose more money when scammed than younger people, and are particularly vulnerable to romance scams, or scams in which someone poses as a romantic partner to build trust and acquire financial information. Gift card and reloadable cards are the most common method to fraudulently acquire money from seniors, accounting for 27% of senior fraud. However, seniors are less likely to report when they are a victim of financial fraud.

DeLiema also testified that the emotional and psychological harm associated with financial fraud from stress, shame and ruined marriages is comparable to the trauma endured by survivors of physical and sexual assault.

Though romance scams lead in losses for seniors, business-related scams grew fastest during the pandemic. A business-related scam usually involves a fraudster impersonating a bank employee to obtain sensitive financial information.

One victim of such a scam, Aurelia Costigan, testified during the hearing. She stated that she was called by a fraudster who told her there were suspicious charges on her account, and that she should make a Zelle account to back up her bank account. The fraudster asked for her Social Security Number as part of the application process, and then proceeded to process fraudulent charges using the number Costigan provided.

The Senate Aging Committee also launched a hotline that can be used to report financial fraud targeted at seniors.

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