Senior purchasing power is well established: the cumulative household value of those 60+ will exceed US $30 trillion in 2020, according to a new study by Tetra Pak, which surveyed more than 40,000 people from 27 countries. That’s a lot of lattes and Lamborghinis. Or spandex and spin classes. The real question is, are seniors spending their later life earnings and savings wisely — or is marketing taking too high a toll on their wallets?
Once upon a checkbook, marketing to the older generation meant cold cream, arthritis medication, long-term care insurance, and similar products that held little appeal for other demographic groups — not to mention the seniors themselves!
But in the past decade, senior resources such as SeniorMag.com are serving up a veritable banquet of ways for businesses to target seniors. Which isn’t a negative in itself, although unscrupulous businesses can take advantage of this influx of disposable income. For example, in this post on marketing to seniors, SeniorMag writes, “If your business offers products or services that are of interest to seniors, at least 70% of your customers should be over 50 years old. If not, you are losing some of the best paying and loyal customers there are.”
It’s worth keeping your HECM clients and prospects, as well as their family members and care assistants, apprised of business marketing tactics aimed at seniors because, however well intentioned, they can backfire. One LO writes,
“Today is Amazon ‘Prime Day’ where if you are a member, you can buy items at discount. It got me thinking about something we all seem to be bombarded with these days: advertised bargains that are not always real bargains. Many seniors may get taken in by these.
- Instead of a discount when you buy one item, you have to buy 2 to get a savings.
- You have to sign-in to receive ongoing emails if you want to get a savings coupon.
- You have to join and become a member to get a special price…and you have to pay to join or can have a free 30-day membership to try it out. Then you get pressured to continue, or your credit card gets automatically charged.
“Then there are lots of hidden charges in the small print or add-ons to your bill (just look at a cell phone bill as an example). Another in Florida is a “Dealer’s Fee” when you buy a car — usually from $599 to $1,000. They don’t disclose this when you negotiate or sign a buyer’s agreement, but it shows up in the final paperwork. And they won’t take it off — it is just another way of squeezing extra profit from a buyer.”
He’s right on the money. The current issue of AARP magazine carries an article on six hidden bank fees that can ding seniors right and left — and how to avoid these account charges.
No Muss, No Fuss, Just Less Money
Yet these financial “add-ons” may seem benign compared with the horrific story Gideon Schein, a partner with Eddy & Schein In-Home Administrators for Seniors, tells about one of his clients, a retired couple that kept their money with one institution for two decades. The financial advisor had even known the client’s father.
Unfortunately, this high level of trust was severely abused, as the advisor systematically skimmed an extra $20,000 off the client’s monthly distribution. The couple’s daughter discovered the discrepancy, and Schein’s company was able to recover most of the missing money.
While most financial advisors are bound by ethics as well as credentials, it’s a cautionary tale.
You may also wish to review our past posts on senior scams and ways to help your HECM clients and friends stay safer financially:
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