FINRA Introduces Resources for Companies, Employees to Guard Against Early Retirement Seminar Scams

The resource for companies offers suggestions on the evaluation of financial professionals who are actively involved in early retirement seminars.  The resource also offers perspectives on how to evaluate seminar materials as well.  These materials include invitations, slides, handouts and scripts.  Company officials may forward copies of these documents directly to FINRA for review if they have some concerns.  FINRA will then evaluate all of the submitted seminar materials and inform the company whether the materials are compliant and consistent with applicable standards.  

The employee resource is designed to help employees recognize the potential pitfalls of early retirement schemes.  

Both resources, components of this two-pronged initiative for investor education, are dovetailed with two major FINRA enforcement actions.  These actions involved multi-million dollar fines and tens of millions in restitution to employees.  There are additional investigations currently underway.

"Companies offer retirement benefits to help employees lay the groundwork for financial independence when they leave the workplace," said FINRA CEO Mary L. Schapiro. Schapiro, a recent appointee to the President’s Advisory Council on Financial Literacy, went on to say, "Companies don't want to unwittingly help scamsters lure their employees into cashing in their retirement investments early with misleading promises of big financial returns — and comfortable retirement lifestyle — that simply can't be sustained."

Schapiro acknowledged that many third-party seminars offer solid information but there are others that may not be appropriate.  She singled out those whose focus is on the strategy of early retirement.  Of these she said, "Some seminars include misleading assumptions about investment returns, suggest risky withdrawal strategies, or lead to outright fraud."

"This is valuable information," said Society for Human Resources Management (SHRM) Board Chair Janet Parker.  Parker also serves on the President's Advisory Council on Financial Literacy. "As more and more of the baby boomers in the work force near retirement age, human resource professionals can play an important role in helping them safeguard their retirement resources. FINRA's resources can help employees identify sound financial guidance."

SHRM, the world’s largest association devoted to human resource management, has recognized the importance of the investor education initiative and has made the FINRA resources available to its members online at its site www.SHRM.org.