Predators With Bogus Credentials Prey on Older Consumers
Insurance agents and other financial product salesmen who claim to be experts in order to convince their targets that they can be trusted, are hurting legitimate financial professionals while scamming older consumers.
I call these financial scam artists “SMELIE’s”. SMELIE is an acronym for “Senior Market, Education Lacking, Independent Enterprises”. This is not a condemnation of all-or even most insurance agents or other financial service professionals, most of whom conduct their businesses in an honorable fashion. But SMELIE’S have become all too commonplace and their victims are being fleeced for millions of dollars.
NOTE: To see some dramatic footage of SMELIE’s being caught on camera in the process of trying to con older consumers into buying unsuitable annuity products cut and paste this URL into your browser http://www.msnbc.msn.com/id/24095230/ just click on the Video link and you can see NBC’s DateLine using the very same tactics they used to catch child predators last year.
One way you can identify a SMELIE is that they often cover up the fact that they have little knowledge or expertise about the complex planning issues of older people, by purchasing one or more “credential(s)” to make it appear that they have a sophisticated level of education and experience that make them well qualified to advise elders on important matters like planning for long-term care or the best way to invest their retirement savings.
Minnesota’s Attorney General, Lori Swanson was quoted on a recent investigative report broadcast by NBC’s “Dateline” that an “underground industry” has developed to make crooked agents look legitimate. A SMELIE can obtain a title to put after their name such as “Certified Senior Specialist” (CSS), “Certified Senior Advisor” (CSA), “Certified Senior Consultant” (CSC), “Certified Retirement Financial Advisor” (CRFA), “Certified Estate Planner” (CEP) and “Registered Financial Gerontologist” (RFG) by paying a fee, typically in the range of $1000 to $2500, attend as few as 2 or 3 days of classes and then passing an exam, administered by the same company they paid to take the course.
Compare this with legitimate credentials such as the Certified Financial Planner (CFP) designation that require years of intensive course work and study and a rigorous examination administered by an independent testing company with no vested interest in how many pass or fail the exam.
Last September, Joseph Borg, Director of the Alabama Securities Commission and President of the North American Securities Administrators Association (NASAA); told a congressional hearing about NASAA’s state-by-state efforts to combat the problems caused by the proliferation of inappropriate senior financial advisor designations, and outlined NASAA’s policy that would make it a violation of the law to use a designation to mislead investors.
Senator Herb Kohl of Wisconsin, Chairman of the Senate’s Special Committee on Aging said he will develop legislation to provide uniform standards for accreditation to prevent the practices of financial sales agents of using these questionable credentials to gain access to the retirement savings of senior citizens.State regulators, according to Kohl’s office, will be encouraged to adopt these new standards.
The great tragedy is that these frequent, and flagrant practices have given the financial services industry such a bad image in the eyes of older consumers and their families that many who would be well served by purchasing long-term care insurance, reverse mortgages and other financial products that can protect their retirement savings and assets and enhance their quality of life fail to do so because they believe that even legitimate agents who observe a consumer focused code of ethics are crooks as well.
You’d think that reputable insurance companies and financial service firms would hear a wake up call when the agents who sell their products are presented.