SAMPLE LETTER FOR STATE AARP CHAPTERS TO SEND TO SENATORS
March 3, 2010
The Honorable [Name of Senator]
Washington, DC 20510
Dear Senator [Name of Senator]:
On behalf of the [number] members of the [State] chapter of the AARP, I am
writing to express our support for the strong fiduciary duty requirement for brokerdealers providing investment advice contained in Section 913 of the “Restoring American
Financial Stability Act of 2009.
Imposing this responsibility on financial professionals giving investment advice
would enhance protections against abusive sales practices that disproportionately affect
older Americans. The elimination of the broker-dealer exclusion from the Investment
Advisers Act provides much needed tools to combat some of the most pervasive abuses
that target older investors in [State]. For example, they would benefit greatly by up-front
disclosure of the agent’s conflicts of interest that may bias a recommendation, disclosure
of commissions and fees for selling a product such as a variable annuity, and the legal
obligation to act in the client’s best interest, not merely what is “suitable.”
An estimated five million older Americans become victims of financial fraud and
abuse each year.1 In part, this reflects the fact that nearly one-third of all U.S. investors
are between the ages of 50 and 64. Moreover, the transition from work to retirement is a
particularly vulnerable time, as individuals must switch from a strategy based on
accumulating assets for future retirement to one of investing for income during
retirement. When these older investors are defrauded or otherwise taken advantage of,
the results are particularly devastating. Since these victims are generally beyond or near
the end of their earning years they have little or no ability to rebuild their retirement
funds.
1
Securities and Exchange Commission, FINRA, and North American Securities Administrators
Association, Investor Alert, Investment Products and Sales Practices Commonly Used to Defraud Seniors:
Stories from the Front Line.
Section 913 Regulation of Brokers, Dealers and Investment Advisers
Section 913 has been under attack through a misleading campaign by the
insurance and broker-dealer industries, some of whose sales practices would be more
difficult to maintain under the fiduciary duty and disclosure obligations imposed under
the Investment Advisers Act.
On behalf of seniors in [State], we urge you to oppose the effort to eliminate the
section entirely and replace it with an industry supported study. This study is
unnecessary and redundant. The issue of fiduciary duty already has been studied many
times by the SEC, the GAO and private entities. A study would take nearly two years to
complete and leave older investors open to fraud at a time when their nest egg is most at
risk. Weakening the legislation in this way would harm all investors, but the vulnerable
senior population would be hit the hardest.
Our retirees already have been financially devastated during the economic crisis.
The “Restoring America’s Financial Stability Act,” released in November, included
important provisions to ensure that older investors are not further victimized by fraud and
abuses.
On behalf of the estimated five million older Americans who become victims of
financial fraud and abuse each year, we strongly urge you to support restoring Section
913, which requires broker dealers giving investment advice to be subject to a strong
fiduciary duty standard provision, to the financial services regulatory reform bill.
Sincerely,