In December 2005, the Department of Financial Institutions - Securities Division issued a Consumer Alert that cautioned senior citizens to carefully check the credentials of individuals holding themselves out as "senior specialists" and who offer planning or financial services. The alert stated that individuals may call themselves "senior specialists" to create a false level of comfort among seniors by implying a certain level of training on issues important to seniors. However, frequently the training these individuals receive is only in marketing and selling techniques that target seniors.

In 2005, the North American Securities Administrators Association (NASAA) observed a significant increase in designations claiming to provide the holder with expertise in providing services to investors 55 years and older. Although there are some 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 less stringent requirements.

These false "senior specialists" commonly target senior investors through seminars where the specialist reviews seniors' assets, including securities portfolios. The specialist may recommend liquidating securities or other investments and using the proceeds to purchase investment products that the specialist offers. In addition, some of the investments these specialists are marketing are required to have a permit to be offered in the state where they are offered. The validity of these investments can be determined by contacting the securities division to determine whether the investment product has been registered.

As a response to this increase in “senior fraud”, the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) announced a joint national initiative designed to protect seniors from investment fraud and sales of unsuitable securities. In general, the May 2006 initiative includes aggressive enforcement, targeted examinations, and investor education and outreach programs to assist senior investors.

The joint initiative, which builds upon the success of cooperative efforts between the SEC and Florida securities regulators, in conjunction with the National Association of Securities Dealers (NASD), will crack down on senior investment fraud. It will have several components, including targeted examinations to detect abusive sales tactics aimed at seniors, aggressive enforcement of the securities laws in cases of fraud against seniors, and active investor education and outreach assistance.

Federal, state, and NASD regulators have begun to initiate on-site examinations in Florida of firms sponsoring "free lunch" investment seminars to ensure that their sales practices are lawful. These coordinated examinations will be expanded to additional states where seniors may be targets of abusive sales pitches or fraudulent investment schemes in the near future. Regional offices of the SEC are working closely with state and local law enforcement offices, and federal and state regulatory agencies, to exchange information to help to identify and bring administrative, civil and criminal actions to shut down frauds that target senior investors.

An important part of the initiative includes investor education and outreach programs to senior investors. The SEC has developed a "Senior Care Package" of useful brochures for seniors and the NASAA's Senior Investor Resource Center, launched in 2003, is expanding to provide investor education materials for seniors. Regulators are continuing to work to promote investor awareness and greater protection for seniors.

Pursuant to the joint initiative, a working group consisting of representatives of the SEC's Division of Enforcement, Office of Compliance Inspections and Examinations, and Office of Investor Education and Assistance, and representatives of NASAA's broker-dealer, investment adviser, enforcement, and investor education sections are meeting regularly to discuss collaborative efforts to further the goal of protecting senior investors.

If investment advice provided by a broker to a senior investor has caused losses because it was inappropriate advice according to their personal investment profile/goals or the product(s) were not fully explained, the investor should immediately contact an attorney for guidance and direction. Investors may be compensated for their losses if it is proven that the broker's suggestions were inappropriate or the financial risks involved were not disclosed.