National Ethics Bureau Supports Adoption of NASAA
Designation Rule to Protect Senior Investors.
New securities model rule will promote ethical sales practices in
the senior market, says association of background-checked financial professionals.
SAN DIEGO, CA, May 14, 2008—The National Ethics Bureau, a membership organization of background-checked financial
professionals, supports the North American Securities Administrators Association’s (NASAA) model rule
prohibiting misleading use of designations in the sale of investment products to senior investors.
The measure, adopted last month, prohibits the use of senior-oriented designations to mislead senior citizens or
retirees. It also provides state securities administrators with the means to recognize the use of designations
conferred by an accredited organization.
“This is a step forward in the senior-protection movement,” says Steven R. McCarty, NEB Chairman. “The new rule
gives securities regulators a new tool to encourage appropriate use of designations and to prosecute advisors who
use designations to mislead or defraud older investors. NEB supports the objectives underlying the new measure and
values the manner in which the rule was implemented.”
In addition to the new NASAA rule, a committee of the National Association of Insurance Commissioners recently
approved an alert that warns seniors about flimsy designations. It also approved the use of a bulletin reminding
insurers that they are responsible for how their products are advertised, which includes how producers position
their designations with the public.
According to the NASAA measure, financial professionals must not use a senior certification or professional
designation if they have not actually earned the designation or are otherwise ineligible to use it.
Furthermore, financial professionals must not use a non-existing or self-conferred certification or professional
designation or use a designation to indicate they have professional expertise that they, in fact, do not have.
The new rule also prohibits use of designations obtained from designating or certifying organizations that
- Primarily engaged in training professionals how to sell financial services.
- Don’t have reasonable standards or procedures for assessing the competency of its designees or
- Don’t have procedures for monitoring designee/certificant conduct and disciplining them for unethical
- Do not have reasonable continuing education requirements.
Even though the new NASAA measure doesn’t apply to NEB, McCarty says that it fully supports the spirit of the
rule through its efforts to strictly monitor how NEB members display the NEB brand and how they communicate with
the public about their membership.
“NEB is a membership organization similar to the Better Business Bureau (BBB), and not a designation or
certification-granting body of any sort,” he said. “However, we have made it clear to our members that they must
use their memberships responsibly.”
NEB has for some time enforced the following rules regarding how financial professionals may communicate their
- Advisors may only describe themselves as a “member of the National Ethics Bureau” and cannot imply in any
way, whether written or spoken, that NEB endorses or approves of their company, product, or services.
- In addition, members must not state or imply that NEB membership is a professional designation or
certification of any kind or that NEB “verifies” or “certifies” their ethics.
- Finally, members must not use any marketing material or verbal communication that contains subjective or
potentially misleading terminology when describing themselves, such as having “an exemplary record of business
ethics” or referring to the NEB logo as the “Seal of Trust”.
About National Ethics Bureau:The National Ethics Bureau™ (NEB) is a leading advocate for
business ethics in the financial services industry. NEB promotes ethical business practices through its
trade-magazine columns, conference presentations, monthly newsletter, and website content. It also maintains a
membership community of background-checked advisors who have agreed to uphold its principles and membership
NEB also sponsors related services such as Preferred Risk E insurance and state-approved ethics and
compliance continuing education courses for licensed insurance agents and securities brokers.
For the general public, NEB provides the ability to purchase a background check on any financial professional prior
to doing business.
NEB is not a financial designation, nor does it endorse any products or services offered by its members or
For more information, visit www.ethicscheck.com.