Remarks before the Older Investor Roundtable
April 28, 2022
Thank you to the organizers of today’s Older Investor Roundtable: NASAA, and, of course, Rick Fleming and Adam Anicich from the Commission’s Office of the Investor Advocate. And thank you to AARP for your participation.
Today’s Roundtable highlights the Commission’s ongoing commitment to identifying and understanding the range of matters unique to older investors. Helping older investors requires skill, experience, wisdom, and an ability both to navigate difficult questions around diminished capacity and to respect older investors’ desire for autonomy. Today’s impressive assemblage of panelists brings these qualities to the discussion about older investors.
Part of the discussion will focus on the reality that older investors make an attractive target for financial criminals. Older Americans hold most of the nation’s wealth. Four years ago, the Securities Industry and Financial Markets Association, better known as SIFMA, estimated that Americans over the age of 50 held nearly 80% of the financial assets in the country. I suspect that number is even higher now. Fraudsters are eager to exploit the combination of wealth and the cognitive decline that may come with age.
Changes in the market and how we interact with it can exacerbate the problem of elder fraud, but also can afford older investors greater control and enhanced options. Older investors conduct business through online platforms, use robo-advisors, and buy crypto, so memes about your great aunt being intimidated by technology are outdated. Nevertheless, cybercrime is not a thing of the past, and older investors, along with their younger counterparts, need to guard against it. Helping older investors know the signs of potential fraud to protect themselves and the assets they worked a lifetime to accrue must remain a central feature of our collective outreach efforts. We can help them protect themselves without telling them that new technologies are off limits for them. Indeed, new technologies can be part of combating exploitation of older investors.
While protecting older investors from bad actors, we also must protect their autonomy. More retirees rely on the assets in their defined-contribution plans, such as a 401(k) or the Thrift Savings Plan, than on the previously more common defined-benefit plans. One of the hallmarks of the defined-contribution plan is the active role that the retiree plays in managing her money. This change need not be a negative development; through individual research or working with an experienced financial adviser, today’s workers can build nest eggs sufficient to fund their retirements and pass something on to the next generation. But with this greater autonomy comes responsibility. Retirees must stay informed, have clear investment goals, know their risk tolerance, and take precautions to prevent themselves from being hurt by fraudsters or incompetent financial professionals. Regulators have a role in combating fraud and ensuring that financial professionals are serving their clients well, but regulators are no substitute for educating and empowering investors to protect themselves.
We work with our partners, including those represented here, on all aspects of protecting older investors. The SEC has become an important resource for older investors through our Office of Investor Education and Advocacy, our Office of Investor Advocate, investor.gov, investor bulletins, outreach events, and gatherings such as today’s. State securities regulators also play a key role in educating older investors and their caregivers. So too do private-sector organizations, self-regulators, and the financial services industry. We must talk to one another and share ideas, concerns, and tools for communicating more effectively with investors. Among other things, we ought to be looking for ways to use new technologies to communicate more effectively with investors and to enable them to interact more fruitfully with us and the educational information we provide them. We also ought to work together to inform American investors, at whatever stage in life they may be, about the opportunities to improve their and their families’ lives that come with participation in our wonderful capital markets. With that I will thank you all once more and say how much I am looking forward to learning from today’s discussions.
 Senior Investor Protection, SIFMA, https://www.sifma.org/exploreissues/senior-investors/, cited in Elder Financial Exploitation: Why it is a concern, what regulators are doing about it, and looking ahead, SEC, Office of the Investor Advocate, June 2018, n.62, https://www.sec.gov/files/elder-financial-exploitation.pdf.