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No Free Lunch!

The Huffington Post The Huffington Post 26/10/2015 Terry Savage

There is no free lunch. Or dinner either. So if you get an invitation in the mail to a wonderful meal where an expert will be discussing an important retirement topic -- such as maximizing your Social Security or estate planning and living trusts - don't go!

You will find yourself paying for that "free meal" many times over. How do you think they can afford to make such a generous offer? They are expecting a good percentage of the attendees to purchase expensive products like annuities, or spend an exorbitant amount on an estate plan.
I'm sorry to paint all those events with the same brush, but I'm not alone in doing that. Last week the major securities regulatory agencies, including the SEC, and FINRA, and the NASAA (North American Securities Administrators Association) listed those "free lunch" seminars as one of their greatest concerns when it comes to "elder financial abuse."

But with 10,000 Americans reaching age 65 every day there is a growing need for advice about how to manage retirement assets, and a desperate search for trusted advisors. That creates a wide open opportunity for financial fraud or abuse on the part of slick salespeople who gain the trust of naïve seniors.
When it comes to investment issues, FINRA, (the Financial Industry Regulatory Authority), recently created a toll-free helpline to assist seniors with questions about their brokerage accounts, including statements and individual investments. The toll-free number (844-57-HELPS or 844-574-3577) is staffed from 9 a.m to 5 p.m. ET, Monday through Friday.

But the best problem resolution is no substitute for financial abuse prevention. One way to get unbiased advice is to use a fee-only certified financial planner, who has no incentive to sell you a specific product or service. NAPFA (the National Association of Personal Financial Advisors) maintains a planner search tool at its website Financial Abuse

It's one thing for a confused senior to make a mistake in trusting the wrong person - or falling for the "free lunch" deals. But the problem of taking advantage of seniors rises to another level when investment ignorance is supplanted by actual financial elder abuse.
Over the years I've written several columns about the fast-growing problem of elder financial abuse. It happens even to those who have concerned family members. Their adult children are afraid to discuss the issues of estate planning and budgeting and bill payment with their aging parents. As a result, many seniors send their money to online ministries or are victimized by home repair scams or all sorts of other fraudulent activities.
The time to discuss those issues with your parents is over the upcoming holiday season. Elderly parents have the right to be insulted at the possibility they can't control their own finances. But they also should be grateful to have children who care.
On the other hand, a growing amount of financial elder abuse actually comes from adult children, who rip off their parents' savings on the rationale that "they're going to get the money anyway after they die, so let the state take care of them now." That's illegal. And if you know it is happening in your family, it should be reported to law enforcement or the state department of aging.
What happens to the millions of seniors who have no one but a caregiver looking out for them? Sadly, caregiver fraud is another growing form of elder abuse. An isolated, dependent senior may turn to the caregiver out of need or fear, with no one around to prevent the theft.

Even banks, which should be the front line of prevention because they can see changing patterns of spending and unusual withdrawal are handcuffed by privacy laws. Somehow they are able to alert you to a potentially fraudulent use of your credit card. But they cannot deny a withdrawal to a senior who comes to the teller window with a caregiver.
FINRA, the securities watchdog, has proposed a rule (FINRA 2160) that would place a temporary hold on disbursement of funds from investment accounts if there is a concern of exploitation.
Financial elder abuse is a growing, and devastating problem that will only increase as more seniors are left vulnerable. It's hard to believe, but there is still no national law covering financial elder abuse. Every state, however, has an elder abuse hotline as part of its department of aging. The best place to search for resources is the website of the National Center on Elder Abuse.
It's time to start paying attention to the issue of elder abuse, not only for the sake of our parents, but because one day we, too, could need protection from elder abuse. And that's The Savage Truth.

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