On the one hand, advocates urge them to be sure that family members are kept in the loop about what financial advisers are doing, lest the adviser set them up for a con. On the other hand, brokerage firms are telling their advisers to keep watch for signs that family members or caregivers may be on the take.
"I think that's the tension," says Susan F. Axelrod, executive vice president, regulatory operations at the Financial Industry Regulatory Authority, which oversees the nation's 632,000 stockbrokers. "It's easy to say if you have someone exhibiting diminished capacity that you should get the family involved, but often the family members are taking care of their own best interests."
Seniors who discover they're being fleeced by family or caretakers often don't report it, say experts, because they are ashamed that they've been victimized and fear reprisal from their abusers.
Longevity is the gasoline being thrown on the fire, according to Speyer. "Twenty-five years ago, people just died earlier," she says. "In the 1990s, I was dealing with seniors who were much younger" and hadn't lost so much of their cognitive capacity.
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A report last year by the Consumer Financial Protection Bureau said the 65-plus population in 2030 is projected to be twice as large as it was in 2000, increasing from 35 million to 72 million. Smoothing the way for con artists is an alphabet soup of official-sounding "senior designations" that look authoritative on business cards, but often are little more than a made-up credential that requires no education or training. (Among them are "Certified Senior Adviser," "Elder Care Asset Protection Specialist," "Chartered Retirement Planning Counselor," "Registered Senior Investment Adviser.")
In addition, the increasing number of seniors who are comfortable with using the Internet is not helping things, Speyer says. "Once the scam is in Nigeria or Canada or Jamaica, you can't just get your money back, because it disappears like air."
Speyer says one of her clients fell for a con man who said she'd won the lottery, but that it would take $400,000 upfront to access her prize. Today she lives in a state nursing home, having lost all her assets.
Many seniors who have lost large amounts discover that Medicaid won't cover them: The government does a 5-year "look-back" at assets, which can mean rejection of benefits to the senior who was wealthy not long ago, but penniless today, Speyer says.
Senior advocates say that among the assortment of scamsters from family members to solo con men, the best hope for victims is when it's a stockbroker who has taken advantage of an elderly investor. Brokers at least are registered with government regulators and work for firms that may have assets that can be tapped in a lawsuit.
Seniors of means who have lost large amounts -- but not all -- of their money at the hands of brokers have the best chance of getting some money back in a Finra arbitration. Disputes over four- or five-figure amounts have little appeal to most securities lawyers: Investors of modest means aren't able to pay lawyers by the hour, and a contingency arrangement to take a third of any award wouldn't compensate a lawyer for his or her time.