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Investors urged to check credentials of Senior Specialists

June 24, 2008

Investors urged to check credentials of Senior Specialists

For Immediate Release: June 24, 2008

Commissioner Wilson warns seniors about deceptive sales practices.

(St. Paul, MN…) The Minnesota Department of Commerce today urged seniors to carefully check the credentials of individuals holding themselves out as "senior specialists." Insurance and investment salespeople frequently use the "senior specialist" designation to create a false level of comfort among seniors by implying a certain level of training on issues important to the elderly. But according to state regulators, the training they receive is often nothing more than marketing and selling techniques targeting the elderly.

"There are some legitimate training programs for salespeople who work with seniors, but most of these designations are phony and can be confusing and deceptive to Minnesota seniors," said Glenn Wilson, Commissioner of the Minnesota Department of Commerce.

The North American Securities Administrators Association (NASAA) has observed a significant increase in designations claiming to provide the holder with expertise in providing services to investors 55 years and older. Securities regulators have opened several major cases in the past year involving "senior specialists" in the eastern half of the United States alone. Most of the cases involve securities recommendations by individuals who are not properly licensed by state securities regulators.

The Department of Commerce has also seen an increase in cases dealing with deceptive sales practices to seniors and has taken 13 enforcement actions and levied $4.9 million in fines in cases involving the suitability of products sold to seniors since 2003.

Bogus senior specialists commonly target senior investors through seminars where the specialist reviews seniors' assets, including securities portfolios and typically recommends liquidating securities positions and using the proceeds to purchase indexed or variable annuities products or other investments the specialist offers.

In many jurisdictions, including Minnesota, these recommendations may be viewed as providing investment advice for compensation. "The senior specialist would be offering investment advice as an unregistered investment adviser and, therefore, be subject to enforcement action by our Department," Wilson said.

Although there are legitimate organizations whose members must complete rigorous programs of study, pass extensive examinations, and have practical experience in order to receive their designations, a number of entities formed in the last few years have created designations with much less stringent requirements, Wilson said. Without reviewing the course material for each of these designations, it is difficult to verify the claims made by the promoters. 

"Before doing business with any investment professional, please check with the Department of Commerce to make sure they are properly licensed and do not have any enforcement actions on their record," Wilson added.

For more information, visit the Minnesota Department of Commerce website at and Senior Investor Resource Center on the NASAA website at for additional investor education and protection tips for seniors.