The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
May 16, 2012
A new study based on a startling court case...
Could you be sentenced to prison for selling an approved investment to an 80 year old?
In February of this year a California financial professional was sentenced to prison for selling an annuity to an 83 year old. The annuity was approved by the State of California for sale up to age 85 and the client at no time experienced a financial loss. However, because it was subsequently determined that the client had dementia at time of the sale the financial professional was convicted under elder abuse laws.
A new Advantage Compendium study examines how the issues of cognitive impairment, elder abuse laws and senior decision-making can affect financial professionals. Some of the finding of this new study:
ª Seniors do need to be treated differently. However, based on cognitive research, a cut-off point of age 80 rather than age 65 should be used to define who is a senior
ª If you take a strict look at the way suitability is defined by FINRA and NAIC regulations, having dementia does not necessarily affect the suitability of the sale
ª 1 out of every 2 eighty year olds are cognitively impaired
ª The 6 questions anyone can ask that can detect dementia
ª The prevalence of financial abuse of seniors by financial professionals
ª The ten factors that help seniors make better decisions
The 24 page study Addressing The Challenges Created By Cognitive Changes In Seniors examines issues in senior decision-making, the prevalence of dementia and cognitive impairment in seniors, how to detect cognitive impairment, the concept of senior suitability, what constitutes elder abuse, alternative ways to address the challenges in the senior market caused by cognitive impairment, and ways financial professionals, broker/dealers, advisory firms and insurance companies can work more effectively with seniors. This groundbreaking study is published by Advantage Compendium and is available for $390 at http://www.advantagecompendium.com or by calling 314-255-6531.
Advantage Compendium Ltd.
is led by Jack Marrion, providing research and consulting services to financial firms in a variety of areas. His insights on the retirement world have appeared in hundreds of publications including Business Week, Kiplinger, Smart Money, The New York Times and The Wall Street Journal. In 2009 Dr. Marrion was asked to speak at the National Association of Insurance Commissioners Washington meeting on how seniors make decisions.