The elderly are incredibly susceptible to fraud and schemes. Not only have they been raised to expect honesty in the marketplace, they are often too embarrassed to tell anyone when they have been taken advantage of or defrauded. In addition, they frequently live alone or suffer from physical or mental disabilities, making them prime targets for scammers and corrupt brokers.
How to Prevent It
If you are an elderly investor, or if you have a loved one who is, it is important that you do the research before signing with any broker or member firm. The Financial Regulatory Authority (FINRA) has a free tool for investors to use, called the BrokerCheck Report. This search engine allows you to search any stockbroker or broker-dealer firm that is currently registered with the SEC and FINRA. Simply type in the name of the investor, or the broker-dealer firm they work for to receive a record of all of their prior FINRA disputes, customer complaints and arbitrations.