Educating Aging Investors – Millennial to Baby Boomer Generations

[UPDATE] On June 21st, 2018: The U.S. Court of Appeals for the Fifth Circuit issued a mandate today that vacated the DOL Fiduciary Rule.

With over 20% of the U.S. population projected to be over the age of 65 by 2030 (compared to 13% in 2010), the protection of aging investors continues to be a high priority for the SEC and other regulatory bodies.

The SEC encourages that investors (of all ages) should complete their due diligence, in order to formulate a trust that your firm is safe to invest with.

Given the size of the Baby Boomer population and its increasing reliance on investments, coupled with the rising, tech-savvy Millennial generation’s entrance into the world of retirement investing, ample information is becoming a critical piece of the puzzle for investors in choosing the right partner to guide them in their investment strategy.

These investors, in both the Millennial and the Baby Boomer generation, represent a vulnerable population — one lacks experience and education, and the other is beginning to experience the effects of age-related illnesses, especially Alzheimer’s and dementia. Combined, both potential investor age groups require guidance along with a commitment from their firm of choice to take whatever steps necessary to protect them and their investments.


Factors to Keep in Mind When Working With Aging Investors

Though Millennials may simply require some education and guidance to get to a place where they can invest properly and intelligently, aging investors represent a distinctly vulnerable population that often becomes the target of fraudulent individuals. Even reputable firms need to take a proactive stance on this matter as negligence may occur when firms do not account for issues like diminished capacity or elder abuse.

In both cases, firms need to have robust internal controls to ensure that employees and representatives of the firm — especially those involved in the sale of products and services directed at senior investors — are properly educated about diminished capacity and elder abuse, have a process to follow when either case is suspected, and understand the importance of acting quickly in either circumstance.

Educated Investors Make for Better Clients

The truth is that an educated Main Street investor is a better client, and any good firm is aware of this and works hard to give their clients the tools they need to understand exactly what they’re getting into. In the long run, this helps protect a firm and shows regulatory bodies that you take a proactive role when it comes to empowering and protecting your clients and their interests.

As the DOL’s (Department of Labor’s) Conflict of Interest Rule winds its way through the court system (to view the Fifth Circuit decision, click here) and the SEC continues to focus on the concerns of aging investors, the trend toward greater scrutiny of retirement accounts is only going to increase year to year. Is your firm doing everything it can to protect aging investors and new investors?

Listen to our podcast about aging investor concerns to learn more about what your firm can do to protect these vulnerable populations.

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