Nebraska Requests that IA Firms Prohibit IARs from Using Senior Designations & Cautions Against “Free Lunch” Seminars to Seniors

December 03, 2006

The Nebraska Securities Bureau recently issued a special notice to all federally covered and state registered investment advisors in Nebraska requesting that “firms prohibit the use of all professional designations that state or imply a specialized knowledge of the needs of senior investors by their … investment adviser representatives registered in Nebraska. This prohibition should cover all mass mailings, advertising, business cards and letterhead of the … representative.” (The Nebraska securities regulator noted that the CFA, CFP, ChFC or CPFS are still acceptable professional designations.) This effort appears to be aimed directly at barring designations such as the Certified Senior Advisor (“CSA”). Although this special notice is crafted as a request instead of a rule, the Nebraska Securities Bureau is warning investment advisors that it will pursue enforcement actions if an investment advisor representative uses a professional designation in a manner misleading to investors.

Also within this special notice, Nebraska announced that each investment advisor must report all the “free-lunch” sales seminars that its investment advisor reps have offered or plan to offer to seniors. The Bureau specifically urged investment advisors to exercise care when offering complex products to seniors. RIA Compliance Consultants believes it’s likely that those investment advisor reps (even when acting in their capacity as insurance agents) marketing equity indexed annuities through such seminars will be subject to intense scrutiny from the Nebraska Securities Bureau, which very well could include field examiners attending client seminars and subsequently interviewing clients sold equity indexed annuities. As a result, investment advisor firms in Nebraska should carefully review the insurance activities of their investment advisor reps.

Posted by Bryan Hill
Labels: Advertising