COMPLIANCE WATCH: FINRA Trying To Stop Retirement Scams

[Omaha Steve]

http://money.cnn.com/news/newsfeeds/articles/djf500/200709171148DOWJONESDJONLINE000445_FORTUNE5.htm

September 17, 2007: 11:48 AM EST

NEW YORK -(Dow Jones)- The brokerage industry's major self-regulator is trying to get into investors' workplaces before scam artists do.

In several recent high-profile cases, groups of employees were persuaded by financial advisors to dump their workplace-sponsored plans in favor of handing their assets to the FAs - with disastrous results. Now the Financial Industry Regulatory Authority is reaching out to human resources departments and unions.

The goal is to give them tools to evaluate financial professionals who may want to "help" the company's employees invest their retirement savings. FINRA will even review marketing materials being shown to employees.

Retirement plans have "a large aggregation of assets. It's logical that people would target this area," said Elisse Walter, senior executive vice president of regulatory policy and programs at FINRA.

"HR departments aren't necessarily experts in these types of issues," she said. "They will welcome help from people who are or appear to be well-qualified investment professionals. Many of these could be quite good. (But) we have found some very problematic ones."

In a June survey by FINRA, 42% of 1,334 investors said they had received advice or information recommending that they roll over their pension, 401k or other employer-sponsored retirement plan and invest the proceeds.

FULL story at link.