Nowadays it seems that Rodney Dangerfield’s trademark phrase “I don’t get no respect” can be appropriately applied to the everyday lives of many seniors. While much attention and focus is placed on the emotional, physical and financial abuse by family members there are other areas where seniors experience a different type of abuse that tends to go undetected. That abuse should probably come under the caption ‘getting no respect’! Seniors are treated with disrespect at the checkout counter doing grocery shopping, getting a seat on public transit, greedy relatives, home renovation scams, substandard service by health care providers and yes, dealing with banks and the financial industry. It is the latter that is of particular concern to seniors, especially those surviving on modest retirement incomes.
For example, about a year ago a bank fraud was revealed where 31 seniors across Canada were defrauded of almost $206,000 by an employee at a charter bank. (Refer to this link:
Bank employee accused of stealing from accounts
Another example is ‘reverse mortgages’. Seniors who have paid off their mortgage should be wary of the ‘reverse mortgage’ offered by banks. While this option might appear to be appealing it can have negative unforeseen consequences with respect to your net worth. Many seniors might not understand the implications associated with reverse mortgages. In particular the interest rate for a ‘regular mortgage versus a reverse mortgage’ and the regulations governing reverse mortgage. (For more information on reverse mortgages you can refer to this link: Reverse mortgages are set to rise, unfortunately
There is a more troubling aspect of financial abuse that at first glance appears to be a benign issue. It is related to mediocre financial service and inadequate advice from financial advisors and financial planners in the financial industry. It appears that seniors, particularly those of modest incomes, have a lot less value in the eyes of financial advisors than those seniors with substantial financial worth or even younger clients. One must question whether these advisors provide accurate or expert advice to seniors. Surely when dispensing financial advice to seniors there should be far less emphasis on investing in high-risk speculative products at their late stage of life.
More emphasis should be on recommending dependable products where capital is protected. Younger clients have more time on their hands to recoup losses incurred from investing in high-risk products but seniors do not. It should not be overlooked that high-risk products tend to have management fees and other hidden charges. These products also provide financial advisors and brokers with generous commissions. In addition to inept financial skills of financial advisors, vulnerable investors have seen their nest eggs whittled by fraud and mismanagement.
Financial advisors seem to be of the opinion or assume that many seniors are not very financially literate hence they don’t take the time to give proper advice on how to handle their retirement portfolios. Many of these advisors used unfamiliar financial jargon to communicate to clients. That behaviour toward any client is discourteous, condescending and offensive. The encounters many seniors have with staff in the financial industry also indicate that advisors are not as knowledgeable as we expect them be. The lesson here is definitely ‘buyer beware’. Providing inferior or misleading financial advice is of great concern to all clients given the current volatile economic climate and concerns about inflation. More focus should be put on delivering better quality advice to protect the retirement income of seniors and, for that matter, all investors.
The use of Rodney Dangerfield’s comedic reference to “no respect” is not intended to trivialize or downplay the seriousness of any form of elder abuse. The idea of ‘no respect’ is intended to show how subtle forms of elder abuse inflicted by non-family members can affect the financial well-being of seniors. Even more important, the deficient and unsatisfactory financial advice from advisors in both the chartered banks or private investment firms is a matter that requires closer scrutiny.
When managing their hard-earned investments seniors need to become ever more financially literate in their dealings with advisors who may or may not be skilled/experienced or well-trained. Given the chaotic economic situation all over the globe we have to question whether it is in our best interest to even listen to the advice of these ‘financial advisors’. While greater transparency is needed in the financial industry with regard to fees and commissions, the issue of unprofessional behaviour and substandard advice given to seniors needs to addressed. Otherwise seniors who are encouraged to invest in high-risk products might find themselves chastened as they see their portfolios shrink.
Hope you are intrigued by this post and are inspired to pay closer attention to your investments and also be more wary of the advice dispensed by financial advisors. Shall look forward to your comments about your experiences as a senior dealing with the banking industry and financial advisors.
NOTE – Check this federal government link to access information on elder abuse and various services for seniors:
Elder Abuse Awareness