Last updated:
05-Oct-2009
Senior Fraud Alert: Beware Financial Planners With Shady Credentials
How to Protect Your Family From Insurance and Investment Scams
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This was just one short post, and I plan to address more of these issues in future. I realize that some of these credentials, if added to the deep background of being a certified financial planner. However, my information, which was accurate, came from lawsuits filed around the country by people who have been defrauded by people with just the aforementioned credentials, so I believe this can stand as an important warning. The same goes with the insurance companies listed; yes they sell valuable policies and are represented by reliable agents. But they are also the companies turning up again and again around the country in class action lawsuits, and that's a red flag. Several of these lawsuits single out these companies for their pushy tactics in presenting products to seniors who may not need them or benefit from them. Again, I believe knowing this is useful to people as a warning to be cautious and investigate thoroughly before purchasing.
Great post, I work on a blog that discusses senior aging in place ideas and in-home care. We are writing a series on scams that focus on the elderly. If you are reading this and want to learn more, check out that series at: http://www.rightathome.net/seniorhomecare/?p=297 Keep up the great posts, Bill
Dear Ms. Haiken Thank you for your recent article, Senior Fraud Alert. We as an industry need to keep a constant vigil in this area. However, your details were a bit off the mark in several important areas. For example, the broad stroke with which you condemn six entire designations as “fraud” was just that, very broad and generalized. I can only speak about the CRFA, Certified Retirement Financial Advisor, designation, but I can assure you that the curriculum involved in this program is of great value to senior clients across the country. I’ve been a CFP (Certified Financial Planner), a designation you apparently highly approve of, since 1991. However, when I took the CRFA course it was quite a revelation. The amount of overlap with the CFP material was perhaps 10%. The time I spent in Dallas taking the classes, and studying the very thorough written materials that accompanied that training, was time very well spent. I am confident that my clients have benefited greatly from its additional knowledge and insight. The specific areas that were not exactly accurate in your report include: 1. Many, if not most, CRFA candidates take the classes in person, not just via correspondence. However, even those who choose to only receive the materials and self study still have to pass the same exam. The exact same thing is true for CFP candidates. 2. Yes, the exam is multiple choice, but so is the CFP exam. 3. A simple exam? Maybe not so much. While not as comprehensive as the CFP exam it is in far greater detail and requires far greater expertise in the retirement planning area than the CFP. And true enough, “if it sounds too good to be true….” is a reasonable rule of thumb. However, lambasting an entire sector of the financial service industry with such broad strokes, based upon what was obviously limited research, is hardly a rule of thumb our collective parents would have endorsed. P. Frederick deNapoli, CFP, CRFA Peabody MA
I too am very concerned about frauduless representation among financial advisors, and as such have done my homework on the issue. In doing so I recognized some errors in Miss Haiken's treatise. First, the Certified Senior Advisor is a genuine certified credential, not a fraudulent one. However, if this is the only professional or advanced credential utilized by a person dispensing financial advice,then I would go somewhere else. The credential CSA can be earned by professions from many walks of life that work with seniors, such as medical counselors, spiritual counselors,attorneys,and financial specialists. It's not a bad credential but it does not confer expertise in financial matters unique to seniors, and if a financial advisor has this credential in addition to other financial specialized training and credentials such as CFP, CLU, ChFC, etc., then it is a definate plus. The same goes with the Certified Retirement Financial Advisor. This organization is currently becoming certified by the same organization that certified CFP and CSA. You can learn more about what these credentials mean and the advisors that obtain them can offer at their web sites; www.csa.com and www.crfa.com. Pertaining to the insurance companies listed, Miss Haiken suggested that they endorse fraudulent credentials and by association support financial advisors holding fraudulent credentials and are involved in scams. She is way off base on this. All insurance companies have lists of approved credentials that their agents or financial advisors can use when representing their products to the public, or when holding public forums. The companies specifically say that advisors cannot use any credentials not on the approved list. Most companies have their approved lists on their web sites. I have found that the best financial advisors are those who are independent and not affiliated with or paid by a financial investment, insurance, or brokerage companies, that have been in business for at least 15 -20 years, and that have an understanding of the differences in the unique financial requirements and outlooks of senior versus folks who are still working. A good advisor will not only know about sensible investments, but also about taxes and estate matters, and be willing to conduct meetings that include the seniors children present.