JEFFERSON CITY — Many Missouri investment firms lack specific plans for dealing with the unique needs of seniors who entrust them with their life savings, Secretary of State Robin Carnahan said in a report released Wednesday.
The report is the result of a six-month audit conducted by the secretary of state's Securities Division of the policies and procedures of 24 brokerage businesses and six investment adviser firms.
Carnahan said she launched the review because of a growing number of complaints, an increase in reports of financial fraud involving seniors and the general aging of the state's population.
"Every year, hundreds of seniors call my office with questions and complaints about the investment advice they receive," Carnahan said in a written statement. "Missouri seniors should be able to invest their life savings confidently and without fear they will be taken advantage of by their adviser or broker."
The report does not name any of the businesses that were reviewed.
It recommends that firms identify certain investments, such as variable annuities, to trigger a heightened review when sold to a senior and that agents be prohibited from targeting seniors with advertising. It also says firms should adopt practical definitions of an "elderly" person and ensure their account information is regularly reviewed and updated in person.
Carnahan said many firms did not have policies requiring employees to follow certain procedures when dealing with seniors.
"There is an alarming lack of formal, written policies or documented guidelines or practices in this area," Carnahan's report said. "Instead, investment advisers appear to rely on personal familiarity with their clients" and believe they don't need standardized procedures because of their relatively small client lists.
The report said about one-third of the firms examined had specific policies regarding advertising that targets seniors and a similar amount had procedures for detecting elder abuse or financial exploitation by agents.