Protecting senior investors remains a hot button issue for FINRA and an integral part of its exam modules.  So, it's not surprising that FINRA's latest Regulatory Notice focuses on  firms' fair dealing with senior investors, as well as investors at or approaching retirement (together referred to as senior investors). Today's message is about ... use of certifications and designations by brokers and advisers that imply expertise, certification, training or specialty in advising senior investors, and each firm's obligations for supervising its registered persons who use senior designations.

2011 Senior Designation Survey. In January 2011, FINRA surveyed broker-dealers of all shapes and sizes, focusing on:  (i) on the prevalence of senior designation usage;  (ii) the extent to which particular senior designations were used or prohibited;  and (iii) the supervisory systems in place regarding senior designations.  Based on responses by 157 firms, FINRA found widespread use of senior designations among B/D's.

• 68% of firms allow use of senior designations by registered persons.
• Of those firms that permit the use:
  • 89% currently have RRs who use senior designations; and
  • 11% don't have any RRs using senior designations at this time.
  • 73% prohibit the use of particular senior designations.
  • 27% don't have any such prohibitions.
• Of the firms that have prohibitions:
  • some banned the use of only 1 or 2 designations;
  • others firms were much more restrictive - i.e., allowing use of only small number of designations.
• Only 2 respondents noted that they required RRs to obtain senior or professional designations prior to use.
• Majority determined which designations could be used by reviewing course work, or other documentation.
• A small number of firms indicated they took a narrower approach by permitting only a select few designations.
• Others did not require rigorous qualification standards.

To continue reading, go to page 3 of:   [RegNote 11-52, November 2011]. In Part Two, C-I will continue our discussion of this topic, focusing on:  (i) sound practices;  (ii) designation standards and supervision;  (iii) communications with the public;  (iv) training;  (v) annual attestations.   Thank you.