Beware of Bogus Designations

Many insurance companies, and the agents who represent them, want you to believe they are something more than simply life insurance agents. This is where the confusion begins. The purpose of this article is to identify the myths and reveal the illusions created by the insurance industry to advance deceptions about their agents and the investment opportunities they offer. Just like Toto in The Wizard of Oz, I want to pull back the curtain so you can see that all is not as it seems.

First, let’s address the role of the insurance agent. Being an insurance agent is not a bad thing; in fact, it can be an honorable profession providing a valuable service. However, when an insurance agent is not satisfied with the perception that the title “insurance agent” leaves in the mind of the consumer, the challenge to be considered in a more prestigious light has produced some creative designations. If an agent is willing to participate in artful deception or misdirection, the possibilities for exploitation become endless.

In most states an insurance agent must pass an exam regulated by that state’s insurance board. This license allows them to sell life and health insurance. What is important is that it also allows them to sell senior centric products such as long term care insurance and annuities. This license is necessary to legally sell these products. However, knowing the negative connotations associated with the industry, most agents try desperately to separate themselves from the rest of the pack. Because they only have an insurance license, they attempt to camouflage their lack of estate planning education and expertise behind slick company-generated presentations.

Another primary method used by agents to lend the impression of credibility to the senior population is to place a series of acronyms behind their name on business cards, such as CSA (Certified Senior Advisor). Creative designations like this bear no relationship to the education necessary to be a true Investment Advisor. These designations are not recognized by either of the governing bodies with oversight for financial planners or Investment Advisors: the Financial Industry Regulatory Authority (FINRA) or the Securities Exchange Commission (SEC).

The New York Times, in a July 8, 2007 article titled, “For Elderly Investors, Instant Experts Abound,” states that the course which confers the title of Certified Senior Advisor is called a “correspondence course with a multi-choice exam.” The article goes on to quote T. Kevin McElreath, a financial advisor from Milford, Massachusetts, regarding the Certified Senior Advisor designation, saying, “The degree is not worth the paper it is written on…. It’s a scam, a way to put a title on a business card that impresses gullible seniors.” What is worse, many insurance companies actually pay for the correspondence course if the agent will agree to sell their products! Jack Herstein, assistant director of the Nebraska Department of Banking and Finance says, “The training they [senior specialists] receive is often no more than marketing and selling techniques.” (AARP, May/June, 2007)

"How many legs does a dog have if you call the tail a leg? Four, calling a tail a leg does not make it a leg."
- Abraham Lincoln

In addition to bogus designations, there are other ways many agents will try to deceive seniors. To present himself as something he is not, an agent can pay a fee and have his picture put on the cover of an “official” looking trade publication, the inference being he wrote the articles. On April 13, 2008 Dateline NBC aired, “Tricks of the Trade,” confirming several scams. The program exposed an underground industry that furnishes insurance agents with pre-published books and pre-produced radio programs featuring the agent. This intentional fraud is aimed at seniors to give the impression the agent wrote the book, or was actually interviewed on the program. This practice screams out to say “Do business with me. I’m the expert. I wrote the book.” From its very inception it is designed to mislead and lie to the senior, who sadly becomes the next potential victim.

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