Co-authored by Avi Badash.
The Financial Industry Regulatory Authority has issued Regulatory Notice 11-52 (the Notice) to remind firms of their supervisory obligations regarding the use of certifications and designations that imply expertise, certification, training or specialty in advising senior investors (“senior designations”). Examples of senior designations that FINRA has observed include “certified senior adviser,” “senior specialist,” “retirement specialist” or “certified financial gerontologist.” FINRA encourages firms to consider the practices described in the Notice in assessing their own procedures and implementing improvements that will best protect their customers. The Notice provides that, at a minimum, firms must have supervisory procedures in place reasonably designed to prevent their registered persons from using a senior designation in a manner that is unethical or misleading. In addition, all advertisements and sales literature as defined in NASD Rule 2210(a), including communications that include the use of senior designations, must be approved in writing by a registered principal prior to use pursuant to NASD Rule 2210(b)(1). The Notice also includes recommended practices used by some firms that were provided to FINRA in response to a FINRA survey of 157 firms on the use and prevalence of senior designations. Those practices include standards by which firms approve senior designations, reviews of communications with the public to detect violative practices, required training sessions, and periodic certifications of senior designations.
Click here to read Regulatory Notice 11-52.