Wall Street Targeting Older Investors With Structured Product Sales, Reports AARP

Unfortunately, there are elderly investors who end up suffering financial losses because a broker placed their money in investments that are unsuitable for their needs. Many of these investors don’t realize that they may have grounds for a securities fraud claim.

The AARP says that for many elderly Americans, the prospect of running out of money is scarier to them than the thought of dying-especially for those who are too old or sick to go back to work and rebuild their nest eggs. Although broker-dealers and investment advisers know how important it is for older investors to make sure that their money is placed in investments that are low risk, this isn’t always what happens, such as with structured products.

While highly profitable for sellers, structured products aren’t always a great benefit to buyers who could stand to lose everything on an illiquid investment that has limited potential gain. Already, investors have lost about $164 billion in such risky investment. Yet structured product sales continue to grow.

This isn’t surprising considering that, according to securities arbitration consultant Louis Straney, sales commissions on structured products are at 3- to 10%. Last year alone, Wall Street sold $51.86 billion in structured products to US customers.

AARP says that for many investment banks and financial firms, older Americans are among their favorites as buyers for these loosely regulated instruments. Not only do many elderly investors have the money, but also, the pitch, “low risk to principal, and high yield,” is exactly what many retirees want. Unfortunately, many elderly investors may not fully understand exactly what they are investing in, opting instead to place their trust in brokers and financial advisers.

Losing one’s savings or retirement is no joke for the elderly, who now must worry about how to support themselves and pay for nursing and medical care. Also, financial worries can also take a physical and emotional toll on elderly victims.

Our securities fraud lawyers represent investors who have lost money because they were advised to place their funds in investments that were inappropriate for their needs and goals. We also work with senior financial fraud victims.

Related Web Resources:
How Safe Are Your Savings?, AARP, March/April 2011

Is Outliving Your Savings a Fate Worse Than Death?, Reuters, November 12, 2014

Fraud Target: Senior Citizens, FBI
Financial Planning for Seniors, ElderlyCare

More Blog Posts:
Increase of Structured Notes with Derivatives Sales Seduces Retirees, Reports Bloomberg, Stockbroker Fraud Blog, September 25, 2010
Structured Notes Becoming New “Investment Bubble” on Wall Street, says Institutional Risk Analytics Director, Stockbroker Fraud Blog, August 12, 2010
Brokers Renew Push for Investors to Buy Structured Products, Stockbroker Fraud Blog, June 12, 2009