Banks should be cautious in marketing investment products to seniors who are trying to “reach for yield,” Comptroller of the Currency Thomas Curry said Friday.
Banks should give elderly clients heightened investor protection depending on their needs, objectives, risk tolerance, investment experience and understanding, Curry said.
“With the low-interest rate environment we are in today, seniors may be tempted to reach for yield and be susceptible to taking on greater investment risk,” he said during a speech at the National Community Reinvestment Coalition in Washington, D.C.
“Senior clients, however, may not have the ability to absorb or recover from the potential loss of principal.”
In a prepared speech, Curry chastised the role unscrupulous financial advisors play in elder abuse.
Some advisors deplete seniors’ retirement savings by peddling expensive or unsuitable annuities or investment pyramid schemes, he said.
Seniors are also being victimized by people pretending to be their new “best friends,” aiming to build trust so they can siphon money from their bank accounts, Curry added.
He warned elderly individuals also may mistakenly trust a fiduciary agent or a caregiver enough to sign documents giving up ownership or authority over their assets or bank accounts.