New York Securities Fraud Lawyers Blog
New research shows that getting senior-aged investors to exhibit heightened emotions may cause those investors to more easily part with their hard-earned savings and retirement proceeds, according to a New Release published by the Financial Industry Regulatory Authority (FINRA).
The research was made possible with funding from the AARP Fraud Watch Network and the FINRA Investor Education Foundation. In the study, Stanford University Psychologists found that inducing emotions in older adults increased their intention to buy falsely advertised items, according to the News Release. As reported, the study was conducted on younger adults and older adults, with both groups were induced to exhibit excitement or anger before watching advertisements known to be misleading. According to the Release, the young adults group tended to believe advertisements based on their believability, and not subjective emotional states, while older adults tended to believe the misleading advertisements based only on their emotional states.
One researcher was quoted as noting “Whether the con artist tries to get you caught up in the excitement of potential riches or angry at the thought of past and future losses, the research shows their central tactic is the same and just as effective… Cons are skilled at getting their victims in to a heightened emotional state where you suspend rational thinking and willingly hand over your hard earned money to a crook.”
We have represented many senior-aged investors against broker-dealers who did not faithfully protect their money from unscrupulous financial advisors. We have seen firsthand tactics such as getting the older investors to feel emotions such as excitement and fear regarding their finances and ability to rely on their retirement accounts. We also have seen brokers become “a member of the family,” attempting to gain the trust of the investor, so that their conduct either goes unnoticed or unbelieved.