Financial industry firms need to ramp up their capabilities for dealing with senior clients, and they should also be empowered to help defend seniors against financial abuse, suggests a new report from the Ombudsman for Banking Services and Investments (OBSI).
Among other things, the report found that seniors are more likely to bring complaints to OBSI than younger consumers. Seniors generated 38% of the complaints OBSI received in 2017 and 2018, yet they only represent 30% of the population.
On the investment side, suitability and disclosure issues were the top complaints from seniors, whereas fraud was the top banking-related complaint. Mutual funds and equities were the most complained-about products for senior investors. Credit cards were the banking product that raised the most issues.
The report also highlighted some of the challenges faced by seniors in dealing with the financial industry, including an array of barriers to access, such as information barriers, emotional and social barriers and physical barriers that impact seniors more than younger clients.
“Seniors often report being overwhelmed by lengthy disclosure documents that contain too much information and require extended periods of attention and focus,” OBSI reported.
OBSI also said that seniors are less likely to utilize technology, or may be more vulnerable than younger clients in their use of technology due to their weaker knowledge about online security.
The report made a number of recommendations for both the industry and regulators to try to alleviate some of these challenges.
For instance, it said that firms should have legal protections to report suspected elder abuse, and that they should implement “trusted person” procedures so they can address suspected issues with senior clients, such as diminishing capabilities.
It also recommended that firms work to improve the accessibility of their disclosure to clients; enhance risk warnings for senior clients; bolster training for employees on the issues that seniors may face; and properly incentivize employees to provide appropriate services to seniors.