| WASHINGTON, April 18
WASHINGTON, April 18 The U.S. consumer watchdog
on Thursday called for tougher oversight of the credentials that
financial advisers use to show they are trained to work with
The Consumer Financial Protection Bureau said these
financial advisers use more than 50 different credentials, some
of which they can simply buy online.
This creates a confusing array of titles that leaves older
Americans vulnerable to abuse, the CFPB's report said. It noted
that it is often impossible to distinguish between the titles,
which do not clearly indicate what training advisers received
and which are not overseen by a single regulator.
"A senior choosing between an Accredited Retirement Advisor
and an Accredited Estate Planner will likely do so without
knowing which one is required to have five years of experience
and some graduate level education and which is not," CFPB
Director Richard Cordray said.
The report calls for state and federal regulators to require
tougher training before people can obtain designations to work
with seniors and to set standards of conduct for advisers who
claim those certifications.
Congress created the consumer bureau as part of the 2010
Dodd-Frank law and gave it oversight of products such as
mortgages, student loans and credit cards.
Through its office of older Americans, the bureau has been
looking at the problems retired people face in managing their
As part of Dodd-Frank, Congress told the CFPB to look into
special titles that identify financial professionals as having
expertise or training to work with older people.
The bureau found that a variety of financial professionals,
including investment advisers, broker-dealers, accountants and
insurance agents, obtain such titles. CFPB officials said they
believe tens of thousands of people use these titles.
They may be overseen by the U.S. Securities and Exchange
Commission (SEC), the self-regulatory Financial Industry
Regulatory Authority or by state regulators, which do not all
have uniform requirements for people who work with seniors. The
bureau itself has limited authority over this issue, CFPB
That can mean seniors misjudge the training their advisers
have received. Even some industry professionals reported
confusion about what the various designations indicate, CFPB
officials said on Thursday.
Confusion about designations also can open seniors up to
worse abuses, the bureau said.
For example, some designated advisers hold events that are
billed as educational seminars for older people but actually are
held to sell investment products and other services, the report
Cordray said seniors and people with elderly parents need
more transparency. He said his own father is 95 years old.
"He should not have to fend off unscrupulous advisers who
are trying to raid the life savings of seniors," Cordray said.
In addition to pushing for tougher standards for
designations, the report calls for the SEC to create a tool
consumers could use to verify credentials and determine what
training their financial adviser completed to receive it.
The CFPB used research from other regulatory agencies, as
well as information gathered from roundtable sessions with
financial planners, insurance and securities industry experts,
consumer advocates and others, the report said.