Oregon Tightens Regulation on Financial Advisors’ Sales Tactics

Oregon officials have filed proposed rules to better protect Oregon seniors and other investors from misleading sales tactics.

The rules prohibit those who sell financial and insurance products from marketing themselves by claiming they are a “specialist,” “adviser,” or similar title when they have no substantive credentials based on legitimate professional training.

“Seniors are particularly vulnerable to this type of deceptive marketing,” said Cory Streisinger, director of the Department of Consumer and Business Services. “They are looking for ways to invest a lifetime of savings and, as a result, are targeted by many people claiming to have specialized expertise.”

Organizations in both the insurance and investment industries issue many valid credentials that require rigorous coursework and continuing education. However, some salespeople give themselves titles with similar-sounding names to imply they have a certain level of expertise.

For example, Chartered Life Underwriters (CLU) is a legitimate designation; to use the title, professionals must study and pass exams in areas involving life insurance, estate planning, investments, income taxation, and retirement planning. But someone selling life insurance and annuities to seniors – and who refers to himself or herself as “chartered” – may have no specialized training.

Additionally, someone might attend a one-day sales and marketing course and then start using a designation that implies expertise in an area such as financial planning.

The proposed rules prohibit individuals from using credentials that are non-existent or self-conferred, or from organizations that: Primarily teach sales/marketing, do not take steps to ensure students are competent, do not monitor and discipline students for improper conduct, and do not have reasonable continuing education requirements.

Salespeople could face civil penalties of up to $20,000 for using designations that are not backed by reputable organizations with stringent requirements.

Using misleading designations, particularly in selling to seniors, has garnered national attention recently. The U.S. House this week introduced the Senior Investment Protection Act, which would give grants to states to target investment professionals falsely claiming expertise in senior financial issues by using false or misleading titles. With the new rules, Oregon will move forward with these efforts without the need to wait for federal action.