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AliceDavisCompetition for clients has always been there, but as investors age, something you might not have anticipated can happen. The vultures are out there.  Competition with you for their invested assets can become an increased threat when an older client’s judgment is compromised. With impaired judgment, they might fall for the “free meal” seminar, a device to get them to buy an inappropriate product.
An older client who has always behaved a certain way about her investments can go through changes because of cognitive decline. You have absolutely no control over this process and in fact, you may not even notice it initially.  Cognitive impairment can come on very subtly at first. What it can do over time is to cause your client’s ability to make good judgments about finances to go downhill.
A person who is actually ok financially may start to worry unreasonably that he is going to run out of money. Or a spouse gets ill and the costs of care skyrocket, making your client think he needs to do something fast to get a high return on his investments.  There are a lot of slick salesmen out there who know this and count on it.  They are the first ones to offer your client a free meal and a so-called “financial education seminar”.
According to FINRA research,  64 percent of those responding to a survey of people age 40 and over had been invited to an “educational”  seminar with a free meal offered.  FINRA, the SEC and state regulators conducted more than 100 examinations involving free-meal seminars.
They found that in half of the cases, the sales materials contained claims that appeared to be exaggerated, misleading or otherwise unwarranted. And fully 13 percent of the seminars appeared to involve fraud.
These highly polished and sleazy sales people are more than happy to tell your client that they can do a lot better for the client than you are doing with your old, conservative and safe investment strategy.  They dress well, have engaging personalities and are looking for someone who is fearful or easily manipulated. That could be your client.  No matter how educated, smart or experienced your client is, anyone can suffer from loss of cognitive ability.  Aging investors may not be as sharp as they were in a younger day, due to memory loss or other issues. The early warning signs of memory loss also suggest erosion of financial judgment.  That can lead to impulsive purchases and lack of financial judgment about the risks.
What can you do about this? You have an opportunity to do a campaign with all your older investors which can enhance your image, increase the frequency of contact with them and educate them in the process.  It could be a series of emails or personal letters.  Remember that FINRA has issued a warning to all investors to be wary of the free meal “educational” seminar.  You are the good guy or gal, bringing them this important information from regulators who want to protect them.  The body of your email or letter can contain this information:
For every consumer, note these points FINRA wants you to keep in mind before you attend any “investment” or “financial education” seminar, especially with a free meal.
1.  Investment seminars are intended to sell you something. Their purpose in not merely educational.
2.  Beware of the persuasive effect of a high end venue, an expensive meal and a smooth, well-dressed presenter.  These are collectively designed to impress you, but it does not mean that the opportunity being pitched it right for you.
3.  Find out who is really sponsoring the event.  At times,  insurance companies, mutual funds or other companies offering their products are behind the pitch, financing the event and expecting that the speaker, who could be someone you know or recognize, will use the event to drive sales of their products.
4.  You can use FINRA’s Broker Check (800) 280-9999 to see if the presenter is licensed to offer financial products.  If the sponsor is an insurance agent, find out if he is licensed through your state department of insurance or the National Association of Insurance Commissioners.  You can find out information about the one offering products for sale through your state’s securities regulator or the North American Securities Administrator’s association at (202) 737-0900.
Feel free to copy this right into a letter to your clients today. Vary it with your own words and headline. Anyone age 50 and up would be a good candidate to receive it.
Stay in communication with your aging clients.
Let them know you are concerned about the prevalence of these offerings by supposedly qualified people and ask if they’ve been solicited to attend any of them.  If they tell you they want to go to a seminar, dig deeper. Ask questions. Offer to check out the presenters.  If you step up the frequency of contact, particularly with an automated system of emailing your clients, you can only enhance the relationships you have with them.  And in the process, you can not only build loyalty but perhaps save some of them from being seduced away from your responsible management by educating them about potential financial danger.
We encourage you to comment and share your own stories so that we all can become better informed and educated about new scams and ways to protect our older clients and family members.
Carolyn L. Rosenblatt, R.N., Elder Law Attorney & Dr. Mikol Davis, Psychologist, Gerontologist


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