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Editor: Debra G. Speyer, Esq.
Profession: Attorney

Category: Fraud in the News

Baby boomers beware. Baby boomers are coming of age and beginning to celebrate 60th birthdays this year. 77 million baby boomers (those Americans born from 1946 to 1964) will also be looking to what to do with their retirement nest egg- and the unscrupulous are there ready to assist. The North American Securities Administrators Association has identified three problem areas in which baby boomers and current senior citizens will be scammed.

Patricia D. Struck, NASAA President and Wisconsin Securities Administrator advises that "Typically, the specialist recommends liquidating securities positions and using the proceeds to purchase fixed, indexed or variable annuities products the specialist offers," Struck said, noting that anyone who provides investment advice for compensation must be properly licensed with state securities regulators."

Generally, seniors are offered free lunches or dinners by "senior specialists", people who claim to specialize in assisting seniors with their finances. Struck also noted that "seniors continue to be sold variable annuities, which, although a legitimate and suitable investment for some investors, are in many cases unsuitable for seniors because of high surrender charges for early withdrawals, the potential of exposure to market risk, and the steep sales commissions agents often earn when they move investors into this product."