The Securities & Exchange Commission is out with a new report which says that seniors have big money — at least as a group.

“Baby boomers today control more than $13 trillion in household investable assets, or over 50% of total U.S. household investment assets. Projections also show that nearly one in every six Americans will be 65 or older by the year 2020. Given the increasing number of investors who will need advice and guidance, financial services firms are actively developing new products and seeking to provide financial advice and services to investors as they prepare for and reach retirement.”

Now you might think, “aha, seniors, assets, financial planning == wouldn’t this be a great place to discuss reverse mortgages?”

Well, yes it would but you cannot find the term “reverse mortgage” in the SEC report.

Entitled Protecting Senior Investors: Compliance, Supervisory and Other Practices Used by Financial Services Firms in Serving Investors, the study says “securities regulators have long focused on the senior population and its particular vulnerability to fraud and abuse, beginning in 2006 securities regulators expanded collaborative efforts aimed at protecting seniors by providing educational programs targeted to senior investors, conducting focused examinations of financial services firms doing business with senior investors, and prosecuting numerous investment scams preying on senior investors. Securities regulators have also provided information and guidance to financial services firms regarding senior investors. These efforts are part of our shared mission to protect senior investors.”

Right.

How many seniors were told that Fannie Mae and Freddie Mac were great investments, sure things, highly rated and protected with an implied guarantee from the U.S. government, companies too big too fail?

How many seniors were told to get a reverse mortgage — so they could be sold an annuity with low returns and huge prepayment penalties?

Wasn’t 2006 just two years ago?

The report outlines some of the ways to identify diminished capacity and elder financial abuse.

One way to deal with senior financial abuse would be to say that some practices and policies are off-limits, not allowed and banned. The SEC reports that “regulators have identified the use of senior designations in advertising and marketing materials as a possible risk to investors because a designation may be used to imply expertise or credentials, which may be inaccurate or misleading. Many states are limiting the use of designations.”

Many states have taken such steps, but what about the SEC?

Protect your interests. As we tell folks, do not make major financial decisions — including the decision to get or not get a reverse mortgage — without independent financial advice from an authority figure such as an attorney who specializes in elder law.

For the full SEC report, press here

This entry was posted on Thursday, October 2nd, 2008 at 5:50 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.