Wall Street is not doing enough to protect senior investors. Financial regulators warn that senior financial fraud is on the rise, and brokerages and financial advisors are responsible for not doing enough to prevent it.
Senior Investment Fraud
According to financial regulators, senior investment fraud is on the rise and financial companies are failing to protect senior investors. Three out of four state securities regulators believe that senior financial abuses have gone undetected and unreported for too long. Most seniors are retired and depend on their retirement investment funds to provide extra income for living expenses and healthcare. Poor investment recommendations and financial losses often put seniors at significant risk. According to the Virginia Department for Aging and Rehabilitative Services, financial fraud and exploitation accounts for an estimated $1.2 billion each year. In an attempt to recover losses, many seniors turn to investment loss attorneys for legal advice.
According to a recent NASAA survey, brokerage firms reported suspected cases of senior financial fraud to adult protective services in 62% of cases, but failed to report it to law enforcement and state securities regulators. Many brokerages and financial investors reported that they had no policies in place to follow for senior investors, and no way to identify investors who became incapacitated by their financial losses. Unlike younger investors who have time to recoup their losses, senior investors can suffer significant lifestyle hardships due to financial exploitation and investment fraud.
To help prevent senior investment fraud, 50% of state securities agencies have started legislation that requires brokerages and financial advisors who suspect fraud to report it. In February 2018, a new rule takes effect that will allow fund transfer delays if financial exploitation is suspected. The new rule will also require brokerage firms to get a trusted contact name for senior investors to use if diminished mental capacity is suspected. New legislation will help to prevent senior investment fraud and claims for losses commonly seen by investment loss attorneys.
Senior investors can take steps to protect their hard-earned retirement savings from all types of loss, whether from legal investment opportunities or investor fraud. Investment fraud impacts people of all ages, but senior adults with retirement savings are particularly lucrative targets for people who are looking to make money from deceptive practices. With millions of baby boomers now in retirement, there are millions of dollars being invested in senior investment funds.