The report – compiled by the US Consumer Financial Protection Bureau and to be presented to the Securities and Exchange Commission and US Congress – found that American consumers, especially senior citizens, have a lack of understanding about the titles used by financial advice professionals.
The report states that more than 50 professional designations – “typically acronyms tacked on to the end of financial advisers’ titles” according to the Wall Street Journal – are currently being used in the United States, often in an effort to target senior citizen investors.
With such a bewildering array of titles and acronyms, it is no wonder that older Americans are often confused and misled by these titles,” said CFPB director Richard Cordray.
“The financial services industry is complex and its professionals use multiple overlapping titles,” the report states.
“Many consumers do not understand the basic differences between financial professions and the services they provide.
“The large number of similar-sounding senior designations creates additional, undue complexity for consumers shopping for senior expertise in financial planning and investing.”
The report recommended the introduction of “rigorous standards of conduct for those using senior designations” and called for greater enforcement of existing protections.
