A Financial Professional’s Guide to Conducting Seminars With Older Investors

AARP and the North American Securities Administrators Association (NASAA)

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Table of Contents

1

Introduction 3

Basic Compliance 5

Promotions 7Message 7

Design 9

Conducting a Seminar 11Disclosure 11

Event Location 13

Training on Presentation Skills 16

Written and Online Communications 17

AARP Free Lunch Monitor Program 21

Resources 22

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Introduction

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Our population is changing; people are living longer, baby boomers are retiring, and fewer people have traditional pensions while more have defined contribution plans such as 401(k)s. Nearly everyone must frequently make important financial decisions that will determine their standard of living in retirement.

All of these factors combined means that to a greater extent

older people are seeking both information and professional help

to manage their finances—hence the popularity of “free lunch

seminars” and other financial marketing or education events

geared towards them. At the same time, these events are coming

under greater scrutiny from financial services regulators because of

numerous complaints of inappropriate practices.

In this guide, AARP and the North American Securities

Administrators Association (NASAA) highlight best practices for

holding marketing or educational events that will build trust and

attract clients. The information found within can help compliance

officers and practitioners alike avoid the practices that most often

cause concern among attendees and regulators. Further, it can

assist the practitioner in familiarizing themselves with sound basic

practices in communicating to this population.

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Basic Compliance [NEW SECTION]

Basic Compliance

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Financial firms and professionals must adhere to compliance rules created by state and federal financial services regulators to protect all consumers, including older consumers. Highlighted below are some of the most important compliance rules that are intended to protect consumers. This list is not meant to be exhaustive or to supplant your firm’s compliance procedures. Rather it reinforces basic practices that serve your clients well.

Establish Written Procedures – Firms should establish a review process

for seminar materials and activities. First, identify what products and

activities—e.g., presentation materials, promotional materials, event

planning, event evaluation—must be submitted for approval. Once

this has been determined, establish written standards and procedures

that will make it easy for sales representatives to get prompt review for

compliance. Consider developing a compliance checklist and sample

forms to simplify the process for obtaining review and approval.

Materials Development – Representatives should submit informational

materials, radio and TV advertisements samples and/or scripts, fliers,

and web content through appropriate channels for timely compliance

review. When possible, representatives should submit invitee lists. The

firm should review all promotional and informational materials and

make any necessary changes. To simplify the process, consider using only

pre-approved materials for workshops. Firms regulated by FINRA must

submit materials for their review. Insurance companies and producers

must adhere to the various state requirements, such as unfair practices

and anti-inducement or rebate laws. Additionally, firms should ensure

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that representatives don’t use or promote ghost written, third party

educational materials as if they were their own personal work.

Suitability Standards – Each recommended product must be

appropriate for a client based on his or her financial situation, risk

tolerance and goals. Compliance procedures concerning marketing

and/or educational events should incorporate suitability standards

to ensure that all events and related materials are appropriate for

their intended audiences. Younger retirees in their 50s and 60s

have different needs from older retirees. At the same time, avoid

segmenting seminars by age and/or life stage issues if the main

purpose is to sell products and services. Obviously firms should

prohibit the sale of products inappropriate for individuals based on

their age and financial profile.

Monitoring – In addition to having written compliance procedures

and a checklist, firms should establish a monitoring and evaluation

process for seminars. This will help determine deficiencies and provide

representatives with direction on improvement. Firms would be well

advised to develop policies that require supervisors to attend events

periodically to oversee branches and representatives. Supervisors

should frequently speak with their agents to determine how they

handle sales to seniors and regularly monitor seniors’ accounts to

review account holdings. Also, when possible follow-up with actual

attendees to get their perspective on the events. Supervisors should

ensure that recordkeeping for representatives, events and attendees

meets all necessary regulatory requirements. Lastly, institute a

“mystery shopper” program as another way to monitor events (see

more about the AARP Free Lunch Monitor program on page 21).

In addition to having written compliance procedures and a checklist, firms should establish a monitoring and evaluation process for seminars.

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The way that you promote your workshops in print goes a long way toward making the right impression. Both the language and the design elements you employ in your promotional pieces work together to create a good impression with the older clients you wish to attract.

MessageThe words you use in your promotions greatly influence how your

readers, and regulators, perceive the events you are holding. Be open

about the intent of your events and stay away from exaggerated messages.

Education or Sales? – Financial outreach promotions should accurately

describe the event. Regulators are on the alert for events that promise

“education” when the clear intent is product sales and/or account

openings. Be straightforward. If you are promoting specific products or

services indicate that. On the whole, while you may make contacts with

people for further discussion, don’t expect to walk away from an event

with new orders.

Scare Tactics and Outrageous Claims – Regulators routinely find and

take enforcement action against companies that use scare tactics in

their promotions. Often the promotions highlight urgency (“Must buy

today!”) or exaggerate returns (“Earn 20% for Life”). In fact, AARP has

heard from hundreds of members about false or implausible claims. In

conjunction with state securities regulators, AARP created a “mail bag”

where members and the general public send in the solicitations they have

Promotions

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received for free lunch investment seminars. Since October 2008, the

Association has received over 2,200 examples from all over the country.

Examples of some of the more egregious language include:

n “Is Your Annuity & IRA in Danger?”n “Cash-Proof your portfolio from the risk and fees of the

market…Guaranteed!”n “Earn an additional $2,000 per month”n “Obtain 7.2% for 10 Years to Increase Your Income”n “Market Recovery Plan, Earn 13% Guaranteed”

Avoid such phrasing that can draw regulator attention and mislead

clients with unrealistic returns, thus drawing the scrutiny of regulators.

Scaring people just to get them to attend your event is counter-

productive.

Disclosure Language – Including simple disclosure language in your

messages will reassure your audience that you are reputable. People

are accustomed to seeing disclosure language in everything from

financial to food products. And research shows that it will not suppress

attendance—your response rates will still be good.

Scaring people just to get them to attend your event is counter-productive.

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While disclosures for regulated financial intermediaries are generally

governed by specific rules, here is an example of a very basic disclosure:

Mary Salesperson offers securities services through ABC Broker Dealer,

Inc. (Yourtown, ST), Member FINRA/SIPC.

Mary Salesperson offers investment advisory services through Mary’s

Investment Advice, LLC.

Mary’s Investment Advice, LLC and ABC Broker Dealer, Inc. are

affiliated entities.

Mary’s Investment Advice, LLC does not offer tax or legal advice.

Mary Salesperson offers annuity and insurance products through DEF

Insurance, LLC (Yourtown, ST).

Securities and investments involve risk. Risks related to securities and

investment products can never be completely eliminated. Please contact

your representative for more information.

DesignThe format and look of your promotions also impacts your overall

impression. Use appealing colors, rather than fear-provoking language

set against a neon-colored background suggesting alarm. Avoid creating

an appearance of urgency with invitations made to look like express or

special mail delivery, or from a government agency. Use the same font size

for disclosures that you use for the other parts of your promotion so older

eyes can read them.

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Conducting a Seminar

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You can do several things to make your events more successful. Be sure to inform people about you, your background and practice. Select an event location that takes into account the physical impairments that older clients may have. Use and distribute materials that are clear, objective and easy to read.

DisclosureAt the beginning of the seminar, be sure to provide information that will

ensure attendees understand you, your business and the reason you are

hosting the event. They want to learn about you, your practice, and what

to expect from the day. Offering this information upfront will foster trust

and an open learning environment.

Here are some points to cover:

Session format – Explain the objectives of the session, why you are

presenting the material, and clarify participants’ expectations.

Affiliations – Make it clear if a company is sponsoring the event or any

affiliations you have. Don’t hide the fact that it is being held by your

company if that is so. Simply mentioning your name and credentials is

not enough.

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Services – Attendees may be unfamiliar with how different types of

services and products are regulated. Likewise, they may not know how

various financial professions are regulated. So, it is important to disclose

how you and the products you describe are regulated.

Qualifications – Explain that some financial professionals are required by

law to have a license, while others may only have some type of voluntary

certification. Tell people what licenses or certifications you have, and how

people can contact your regulator to verify your qualifications and to file

a complaint.

Legal Obligations – Provide information about the professional fiduciary,

ethical and legal standards to which you are committed under the law.

Experience – Cover your background and previous job functions so that

attendees can evaluate your expertise about various financial products

and services.

Products – Explain the pros and cons of various products and how they

relate to one another, including those that are not a topic of the seminar.

Be sure to mention that products that are suitable now may become

inappropriate when unexpected life or financial events intervene.

Methods and Process – If the primary purpose of the session is to make

sales, then reveal how you work, how you are paid, and what fees or

expenses or commissions are involved in the products you are offering.

Do not make any potential customers feel rushed to make instant

decisions about the financial products you are promoting.

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Be sure to pick a location that is open, accessible and safe. Don’t make attendees feel trapped.

Event LocationThe physical location of the event can affect the comfort and functioning

of older attendees. Reduced mobility, vision loss and reduced hearing

are the primary physical impairments that older people may have. The

more attention you pay to accommodating these physical characteristics,

the more likely you’ll avoid miscommunication or confusion among

attendees.

If you plan to hold a seminar for a group that already regularly meets,

such as at a senior center, church, or library, be sure to learn something

beforehand about who will be in the group so you can tailor your

information for them. Attendees at a senior center may be different than

a garden club group, for example. Send the group sponsor materials prior

to the event so they can approve them. Be forewarned that some of these

locations may not have access to electronic media, such as the Internet or

a video monitor, so you may need to adjust your presentation format to fit

the site.

Be sure to pick a location that is open, accessible and safe. Don’t make

attendees feel trapped. They should be able to leave at any time. Pick

inviting locations like a restaurant or community center. Don’t hold

events in small rooms or other settings that create a pressure-filled

atmosphere. Hold events in safe neighborhoods that are easily accessible

by car or public transportation, and provide free parking.

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Mobility – You should review the physical aspects of your event location

for potential barriers and safety hazards. Below are some things to look

for to make sure your location is accessible.

The site should have:

n Doors that are wide enough for wheelchairs.n Adequate space in the reception area and event meeting room to

maneuver a wheelchair.n No throw rugs, electrical cords and other objects that may trip a

person.n Ramps from the parking area to the space.n Handrails alongside any stairs.n Grab bars on the restroom wall.

Also preview the available seating. A deep, soft chair may be attractive to

some attendees, but others will need firmer, higher seating. Chairs with

arms are much easier from which to get in and out.

Vision – An estimated 14 percent of men and 19 percent of women over

65 report that they have trouble seeing. To accommodate people who are

visually impaired, the event space, restrooms, parking area, outside area,

and lobby should all be well-lit, especially if they have walkways, stairs,

patios or other features that could present safety hazards. At the same

time, try to avoid lighting that casts a glare. Be sure not to present with

your back to a window. It’s hard to see your face and understand what you

are saying when the sun is directly behind you.

Mix up the media by including poll questions or short video clips to keep peoples’ attention.

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Also check the signage at the entrance, lobby and interior to make sure

it’s easy to read so attendees can readily get to your event. Signs should be

illuminated and not be obscured by glare from a glass pane. They should

have strong contrasting colors, such as black or navy blue writing on a

light background such as white or pale yellow. Visual impairments also

present challenges in your written communications. Some suggestions

are discussed separately below.

Power Point presentations are a popular way to impart information. If you

plan on using one, here are some tips to make the most of the learning

experience:

n Use both text and visuals to appeal to different types of learning styles.n Mix up the media by including poll questions or short video clips to

keep peoples’ attention.n Limit the text to no more than six lines.n Use a large font, at least 30 points, so people can see the presentation.n Create clear slides with no more than two different font types. n Avoid using all capital letters, which is difficult to read.n Use short words and phrases (“news headlines”), not full sentences.

Hearing – Be sure to consider how well attendees can hear you. About 60

percent of Americans age 65 and over have some hearing loss. Among

80-year-olds, it rises to 90 percent. The most important physical change

you can make to accommodate hearing-impaired people—including

those with hearing aids—is to find ways to screen out background

noise such as air conditioners, traffic, or other events happening at

your location. This could be as simple as closing the doors to the room

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where you are speaking. If you do close the doors, remember to tell the

attendees that they are free to leave the room at any time. When speaking,

here are some things you can do to improve communication:

n Speak and enunciate clearly.n Make eye contact and only talk when facing the audience.n Speak in a low pitch; do not shout.n Speak at a moderate rate, allowing time between sentences.n Repeat or paraphrase important points as you make them.n Point, touch or use other non-spoken ways of communicating.n Provide a written summary or follow-up information to your discussion.

Use microphones and repeat the questions asked during Q&A so

everyone can hear the discussion.

Training on Presentation Skills Some of the tips above related to hearing and vision point to the

importance of overall training on presentation skills. It’s a good idea to

get hands-on training before you or your staff goes out and speaks to the

public. You can learn how to deliver your content effectively, organize the

material, and practice before you appear before a real audience. Make

sure that you are secure with the concepts you are teaching and can relate

them to the audience using simple and clear words. Larger companies

may offer in-house training. Others can look to adult courses and

professional associations in your community,

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Providing written materials in advance about financial options and potential decisions is a very effective way to communicate with attendees. Written materials attendees take home from a meeting to study before making any decisions are also useful. Helpful written materials include general personal finance materials on saving, investing, insurance and descriptions of any products you may be discussing.

If you are doing a sales presentation, provide written material on the services

you provide or products you sell and explanations of all fees and commissions

that you will receive for them. Also, explain how you work with clients

including information on how and when they can contact you by phone,

email, or any other method.

Written and Online Communications

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All written materials should be in plain language, free of jargon and

technical financial terms. Use words that can be understood by the

average layperson at the first reading. Here is a good example of using

plain language from the U.S. Securities and Exchange Commission (SEC):

beforeThe following description of the particular terms of the Notes offered

hereby (referred to in the accompanying Prospectus as the “Debt

Securities”) supplements, and to the extent inconsistent therewith

replaces, the description of the general terms and provisions of the Debt

Securities set forth in the Prospectus, to which description reference is

hereby made.

afterThis document describes the terms of these notes in greater detail than

our prospectus, and may provide information that differs from our

prospectus. If the information does differ from our prospectus, please rely

on the information in this document.

The SEC has pioneered the use of plain language in investment disclosure

documents, but the same principles apply to any type of material

explaining financial matters. State regulators may have additional rules

you need to comply with as well. According to the SEC:

Plain English means analyzing and deciding what information

investors need to make informed decisions.... A plain English document

uses words economically and at a level the audience can understand.

Its sentence structure is tight. Its tone is welcoming and direct. Its

design is visually appealing. A plain English document is easy to read

and looks like it’s meant to be read. — A Plain English Handbook, U.S.

Securities and Exchange Commission.

In drafting printed materials, think carefully about exactly how much

of what information is necessary. Be sure to cover any required legal

disclosures and provide answers to other questions the reader is likely

to ask—but don’t overwhelm the reader with unnecessary or repetitive

details.

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Financial professionals can enhance the readability of written materials,

especially for people with declining vision, by following these design tips:

n Use short sentences and simple words. n Double-space the text.n Use large print, at least 12-point fonts for older people and at least

14-point for people with visual impairments. n Choose easier-to-read fonts such as Arial and Verdana.n Use contrasting colors, such as dark type on a light background.n Break up the text by inserting headlines, subheads, charts and other

graphic material wherever appropriate.n Leave sufficient white space on the page so that it has a clean,

uncluttered look.n Employ bullets to enhance readability.

Your personal or company website can also be an effective tool to

communicate with attendees. Review your existing website for both

content and design. If you don’t now have information that’s relevant

to this client group, consider adding resources on issues such as Social

Security and Medicare, or how to withdraw funds from a 401(k). Web

design tips include:

n Organize content in simple, logical format.n Follow tips on writing in plain language.n Keep Web articles short.n Choose large, simple types and sizes of fonts.n Add a button that allows the reader to easily increase the text size.n Incorporate sound levels of 65 decibels or higher for any audio materials.n Incorporate links that require only one mouse click.

Use short sentences and simple words.

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AARP Free Lunch Monitor Program

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The Free Lunch Monitor (FLM) program engages AARP members and others to be the public’s eyes and ears at free lunch investment seminars. Individuals who receive a free lunch invitation and plan to attend are encouraged to take the “What to Listen for Checklist.” The checklist was created by AARP and the North American Securities Administrators Association. It is a powerful consumer tool that arms individuals to act as Free Lunch Monitors and report activities that do not adhere to the guidelines set by financial regulators. The completed checklists are sent to AARP, and then shared with the appropriate state regulators for possible enforcement action.

The FLM website, www.aarp.org/nofreelunch, contains all the

information necessary to perform the Free Lunch Monitor duties in

addition to resources for consumers to become wiser and safe investors.

If you want more information on the program or are considering how to

engage the Free Lunch Monitors to attend your firm’s education events,

contact nofreelunch@aarp.org.

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A Financial Professional’s Guide to Working with Older Clients, AARP, 2008.

www.aarp.org/forfinancialpros

Protecting Senior Investors: Report of Examinations of Securities Firms

Providing “Free Lunch” Sales Seminars, Securities and Exchange

Commission’s Office of Compliance Inspections and Examinations,

North American Securities Administrators Association, and Financial

Industry Regulatory Authority. http://www.sec.gov/spotlight/seniors/

freelunchreport.pdf

Protecting Senior Investors: Compliance, Supervisory and Other Practices

Used by Financial Services Firms in Serving Senior Investors, Securities

and Exchange Commission’s Office of Compliance Inspections and

Examinations, North American Securities Administrators Association,

and Financial Industry Regulatory Authority, September 22, 2008.

http://www.sec.gov/spotlight/seniors/seniorspracticesreport092208.pdf

A Plain English Handbook: How to create clear SEC disclosure documents,

Securities and Exchange Commission’s Office of Investor Education and

Assistance, 1998.

When the Baby Boom Era Becomes the Retirement Explosion: A Securities

Compliance Professional’s Guide to Protecting Her Firm and Senior

Customers, National Society of Compliance Professionals, September

2007. http://nscp.org/media/whitepapers/nscp-seniors.pdf

Resources

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AARPAARP is a nonprofit, nonpartisan membership organization that helps

people 50+ have independence, choice and control in ways that are

beneficial and affordable to them and society as a whole. AARP does

not endorse candidates for public office or make contributions to either

political campaigns or candidates. We produce AARP The Magazine, the

definitive voice for 50+ Americans and the worldís largest-circulation

magazine with over 35.5 million readers; AARP Bulletin, the go-to news

source for AARPís 40 million members and Americans 50+; AARP Segunda

Juventud, the only bilingual U.S. publication dedicated exclusively to the

50+ Hispanic community; and our website, AARP.org. AARP Foundation is

an affiliated charity that provides security, protection, and empowerment

to older persons in need with support from thousands of volunteers,

donors, and sponsors. We have staffed offices in all 50 states, the District

of Columbia, Puerto Rico, and the U.S. Virgin Islands.

North American Securities Administrators Association (NASAA)The North American Securities Administrators Association (NASAA) is

the oldest international organization devoted to investor protection.

NASAA is a voluntary association whose membership consists of 67 state,

provincial, and territorial securities administrators in the 50 states, the

District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and

Mexico. To learn how to contact your state securities regulator, visit

www.nasaa.org.

AcknowledgementAARP and NASAA want to thank Response Mail Express for reviewing

this publication.

601 E Street NWWashington, DC 20049

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