March 29, 2024

Bucks Blog: Telling the Difference Among 50 ‘Senior’ Financial Credentials

Say you’re a 70-year-old retiree, and you’d like some help managing your finances. Should you hire an adviser who is an A.R.A., an A.R.P.C., a C.S.A. or a C.R.F.A.?

Good luck figuring what any of that means. Right now, older Americans looking for financial guidance encounter professionals using a bewildering array of letters after their names. There are more than 50 “senior certification” designations now in use, according to a new report from the Consumer Financial Protection Bureau’s Office of Older Americans.

Those abbreviations, by the way, are Accredited Retirement Advisor, Accredited Retirement Plan Consultant, Certified Senior Advisor and Certified Retirement Financial Advisor.

The designations are meant to persuade potential clients that the adviser is an expert in helping older people with their financial decisions, but requirements for obtaining the various designations vary widely. The alphabet soup is confusing, and can leave older adults more vulnerable to bad advice and even outright fraud, the report says.

So the bureau on Thursday made a half-dozen recommendations to federal and state regulators and policy makers to help make it easier for older people to verify an adviser’s credentials and to compare different credentials.

The bureau, for instance, recommends that the Securities and Exchange Commission establish a centralized tool for the elderly to verify a specific adviser’s designation and to compare information about different designations. The report suggests the tool could build upon resources already available, like the commission’s Investment Adviser Public Disclosure, which offers investors online access to registration documents and background information on thousands of registered investment advisers.

In addition, the bureau suggests that Congress and securities regulators require that financial advisers explain their credentials to their clients.

Further, the bureau recommends that regulators at the federal and state level set minimum standards for education and experience required for senior designations. Currently, some credentials require a specific level of coursework, but others don’t require any.

In a conference call with reporters, bureau employees estimated that “tens of thousands” of professionals, including financial advisers, brokers and insurance agents, use some sort of senior credential.

The bureau’s representatives declined to single out any specific designation as being particularly helpful for seniors who are looking for advisers, and said the bureau had no goal in mind for reducing the number of designations in use. But they said that if the bureau’s recommendations were acted on, the number of designations should dwindle and the ones remaining be more meaningful.

Older Americans are often the target of financial fraud, in part because they may have money they have saved for retirement, and also because cognitive decline may make them more vulnerable. Americans over 60 make up 15 percent of the population, but are estimated to account for 30 percent of investment fraud victims, the report notes.

Plus, studies have found that older people may be more likely to rely on recommendations from an adviser with a “senior” credential.

Acting on the bureau’s recommendations can help reduce confusion and better protect older people as they seek to manage their finances, said Skip Humphrey, assistant director of the Office of Older Americans.

Have you hired an adviser using a “senior” expertise credential? Was it a factor in your decision to work with that adviser?

Article source: http://bucks.blogs.nytimes.com/2013/04/18/telling-the-difference-among-50-senior-financial-credentials/?partner=rss&emc=rss

Bucks: Web Site Tracks Nuisance Charges and Worse

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Ever signed up for a monthly online subscription that you eventually forgot about? Or were charged twice for something on your credit or debit card?

Spotting and flagging those charges is the aim of a new Web-based transaction-monitoring service called BillGuard. (Thanks to Jim Bruene and Netbanker for alerting us to the service, which was introduced at the TechCrunch Disrupt conference in May.)

BillGuard’s co-founder, Yaron Samid, said in a telephone interview that the company estimated that the average American consumer lost $300 a year in unnecessary charges. Such charges are often “unwanted” or nuisance charges, like subscriptions people didn’t realize they had signed up for or charges for services they mistakenly thought were free. But “unauthorized” charges may also show up, resulting from misleading marketing or outright fraud.

Yes, Mr. Samid said, consumers should check their credit card and bank statements carefully to identify those kind of items. But in reality, many people are too busy to thoroughly look through their statements. So BillGuard proposes to do it for them, by analyzing the transactions using its own computer scans and also by using  “crowd sourcing” techniques to reap the benefit of others’ experience.

One way BillGuard does this is by scouring the Internet for complaints, looking at sites like the Better Business Bureau, various complaint boards and, of course Twitter. “There is an unbelievable amount of people complaining constantly on Twitter,” he said. Data gleaned from that search, plus feedback provided by its own registered members, helps BillGuard come up with a “reliability rating” for each merchant. When you do business with that merchant, it notifies you — via e-mail — that you may want to scrutinize that particular charge.

To use the service, you go to BillGuard.com and register using your e-mail address and ZIP code. Then you enter your username and password for each credit card or debit card you want tracked (you select the cards from a menu). This, Mr. Samid says, allows “view only” access to your transactions; the site doesn’t store the information and doesn’t have actionable access to your account. (He likened the system to the one used by the budget site Mint.com). In the “unlikely event” BillGuard’s site was hacked, he said, someone would only be able to see your transactions, not your card account number.

The system tracks transactions in real time, and sends you an e-mail if it sees something questionable. Each month, it sends you a summary. Transactions are color-coded (green for good, orange for unsure and red for “flagged”) to help you know which ones need attention. After you review them, you can change the status if you decide they’re all right.

The “unsure” items may include, for instance, a charge from freecreditreport.com — a legitimate site, but one that people sometimes mistakenly think isn’t charging them anything, Mr. Samid said. “These are charges you may or may not want,” he said. If you decide you don’t want it, BillGuard advises you how to go about canceling it or getting a refund.  (In future versions, the service aims to complete that step for you, he said.)

Since the site was introduced, “tens of thousands” of users have registered, Mr. Samid said, adding that he wasn’t ready to give a specific number. The system has already identified unwanted or unauthorized charges in 20 percent of users, he said. As the number of users grows, and they contribute information to the database, it becomes more and more reliable. “The system gets smarter with every new user,” he said.

BillGuard initially considered charging for monitoring multiple cards, but is currently offering the service free and aims to earn revenue working with banks and merchants, Mr. Samid said.

BillGuard is in talks, he said, with three of the five biggest banks in the United States about incorporating the service into their bundle of services for customers. But that raises an interesting question: What if the charge in question comes from the bank, or the credit-card issuer?

Mr. Samid says that question comes up a lot in his chats with banks. His response is that banks are desperate to be perceived as more customer-friendly, and providing BillGuard is one way to do that. “This says to the customer, ‘We’re putting you first.’”

That might end up being a hard sell for banks, which are in the business of developing new fees to raise revenue. But regardless, he said: “We are 100 percent committed to the consumer. We won’t ever have an agreement where someone can pay us to have a high reliability score.”

What do you think of BillGuard’s offer? Would you use it to track your cards?

Article source: http://feeds.nytimes.com/click.phdo?i=59ce41f144329434b8d0712f0aecbe4d