Mass. regulators looking at new professional designation rules for financial advisors
As other states watch closely, Massachusetts regulators are considering new rules that could affect how financial advisors can market their services to elderly investors.
Through the end of November, the Massachusetts Securities Division is seeking comment on its proposal to prohibit financial advisors from using certain professional designations that indicate an expertise in the financial needs of older investors.
"From senior-specialized seminars, to mass mailings and business cards, investors often have insufficient information when trying to decide which designations represent a meaningful achievement by the agent or representative or which designations are simply empty marketing devices," the division wrote in a notice accompanying the proposed regulations.
The proposed rules come amid concerns that senior citizens are particularly vulnerable to misleading financial advice. With millions of baby boomers approaching retirement, financial regulators are stepping up their efforts to protect seniors from investment fraud.
The Massachusetts regulators didn't identify specific designations that could be banned under its proposed rules but said they would accept only designations that broker-dealer agents and investment advisors registered in Massachusetts earn through "a meaningful educational or training process."
There's no deadline for issuing regulations on this issue, a division spokesman said.
Just a handful of comments were posted on the regulators' Web site as of Wednesday afternoon.
Other states are watching Massachusetts closely but are unlikely to take similar action until they see how events unfold there, said Joe Borg, director of the Alabama Securities Commission and president of North American Securities and Administrators Association.
"Massachusetts is the first," Borg said. "Everyone is going to wait to see how that develops." (AP)
