Page 42 - Provoke Magazine Vol2

PROACTIVE STEPS AGAINST SENIOR FINANCIAL EXPLOITATION
It has been estimated that each day for the next 12 years about 10,000 Americans will celebrate their 65th birthday. Crimes against older Americans have become an increasing epidemic. One of the biggest is the finan- cial exploitation of senior investors.
In 2018, the Financial Industry Regulatory Authority adopted rules to help protect seniors. Financial advis- ers must attempt to add a trusted person as an alter- native contact for the account owner. This rule pro- vides a resource for the adviser to question potentially fraudulent account instructions orchestrated under false pretenses or compromised cognition. Some states have adopted protective measures like this regulation to mitigate abuses. As caregivers for our aging parents, we can also take proactive steps against this type of abuse.
GET INVOLVED
Make time to discuss important financial holdings with your parents. Know where financial accounts are held and review current statements. Understand the financial objectives behind investment positions pur- chased. Ask to attend a meeting with the financial ad- viser. It is helpful to see the interaction between your parents and the adviser. As a trusted contact person for the account, it is also important to develop your own relationship with the adviser.
Financial advisers, doctors, and caregivers are some of the most trusted people by the elderly. These in- dividuals are in the position to do the most harm. A study in elder abuse shows that most seniors do not see themselves as vulnerable to financial fraud. The per- sonal relationships formed with professional advisers is an influential factor that leads to control over personal assets.
Investment criminals have been known to seek out churches and rely on transferred trust from pastors to build relationships within potential victims. One such adviser was found guilty in Atlanta, GA for bilk- ing more than $11 million dollars from predominant- ly African American churchgoers. One of the victims
42 Provokeusmag.com
to build relationships within potential victims. One such adviser was found guilty in Atlanta, GA for bilking more than $11 mil- lion dollars from predominantly African American churchgoers. One of the victims included an elderly client who entrusted their entire estate to the adviser. Once the victim passed away the beneficiaries discovered that their investment dollars were an elaborate part of a Ponzi scheme.
KNOW THE LATEST SCAMS
A common scam involving senior investors is the free-lunch investment seminar. The presentation typically features on one investment product that seems to be the best solution for any financial situation. Victims are lulled into a false sense of security through their stomachs.
While there is nothing wrong in attending an educational sem- inar, most of these free-lunch events are sales presentations. Per- formance graphs showing endless growth potential are unrealis- tic. Market values do fluctuate, and hypothetical representation of stock outcomes are only a guess.
If your loved ones want to attend a free seminar, go with them and ask questions. The speaker should know the risks of invest- ing, initial costs, fees, and liquidity. Investment product types are meant for different investors. Long-term investments with less liquidity are typically appropriate for those investors who in- tend to hold for a long period. Aging seniors tend to have shorter lifespans than younger investors.
There are several advisers who target seniors. In The Wood- lands, Texas, an investment adviser convinced 5 clients to cash out of their investments and transfer the money to bank accounts under his control. The investors, two of whom were in their 80s, were mostly invested in stocks, mutual funds, annuities, and in- surance policies believing that he could make them more money. When seniors do not see themselves as vulnerable investors,