Draft_lens6229982module49470302photo_1249598396business-manA new study reveals that broker misconduct is greatest in counties that have a large and wealthy elderly population.

The White House has estimated that broker misconduct costs elderly Americans $17 billion a year.

As Forbes reports in "What Your Aging Parent's Broker Isn't Telling You" a recently released study conducted over a 10-year period by researchers at the University of Chicago and the University of Minnesota reveals that broker misconduct is very common in counties that have a large population of elderly people who are wealthy.

Palm Beach, Fl., for example, has a broker misconduct rate of 18.1%. In other words, 18.1% of brokers in that county had in some way violated the trust of their clients and caused financial losses for those clients.

This is a form of elder abuse if brokers are intentionally taking advantage of elderly clients who might be suffering from memory loss or a lack of attention.

Forbes has a couple of suggestions to help protect against the problem:

  • The website BrokerCheck lists most violations and disciplinary actions that have been taken against brokers. Information can be searched by a broker's name and firm. Not all violations and reports are listed on the site, but it is a good starting point as one-third of violators are repeat offenders.
  • If you are not certain about the investment advice being given by a broker, it is a good idea to get a second opinion from someone with whom you have a fiduciary relationship. For example, an elder law attorney or accountant might be able to give you a general idea about the broker's reputation and the soundness of investment strategies.

Reference: Forbes (March 15, 2016) "What Your Aging Parent's Broker Isn't Telling You"