Compliance July 13, 2009

Officials Say Broker Improperly Advised Ending 401(k) Contributions

A Missouri broker who officials charge had improperly convinced investors to stop their 401(k) contributions and refinance their homes to make money available for unsuitable investments has been ordered to stop those activities.
Reported by

A news release from Secretary of State Robin Carnahan said the Cease and Desist Order was issued against Saint Peters broker Mark McEwen, formerly employed by World Group Securities Inc. McEwen is accused of engaging in dishonest and unethical activities, making inappropriate investment recommendations to clients, and failing to disclose required information.

According to the Carnahan announcement, McEwen urged individuals to “free up cash” or retirement savings by refinancing their fixed-rate mortgages and stopping contributions to 401(k) plans and then use those funds to purchase money market funds and variable universal life policies through World Group and affiliated companies.

“It is outrageous for someone to so blatantly prey on senior investors in this way,” said Carnahan. “This case is an example of why Missourians, especially seniors, need to be very careful about who they entrust to handle their money.”

Regulators charge that McEwen also borrowed more than $130,000 from an 83-year-old Illinois resident, in violation of Missouri law and World Group’s policies and procedures.

In addition to the cease and desist order and possible penalties and costs, the Commissioner of Securities has initiated a separate proceeding to revoke McEwen’s securities registration.

Data & Research July 13, 2009

Economic Crisis Pushing Retirements Beyond Age 70

Losses in the financial and housing markets during the economic crisis are causing many seniors to consider retiring at a later age than originally planned.
Reported by

A new survey from Golden Gateway Financial found that, before the economic crisis, 67% of those polled planned to retire before age 70, but now that number has declined to 40%. Also, before the economic crisis, 30% of respondents planned to retire after age 70, and now almost 50% of seniors plan to retire after age 70

More than 40% of the seniors polled reported the current economy has had some kind of negative effect on their ability to retire, a press release said. More than 50% indicated they are concerned that their overall net worth may no longer be enough to sustain their retirement.

Eighty-six percent of seniors said they have a reasonable understanding of their net worth, and 50% of them indicated their net worth had declined by between 10% and 30%.

The independent online survey, conducted with United Sample, Inc. in partnership with Golden Gateway Financial, polled a nationwide representative sample of more than 500 senior citizens aged 62 or older.

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