As children, most of us were taught to respect our elders.

This simple yet sage advice eludes stockbrokers who prey upon the elderly. Remember, the oldest Americans, after decades of work to accumulate wealth, are often the most vulnerable to friendly sounding financial advice. With yields on bank certificates of deposit and government bonds at record lows, many older investors, on the advice of their brokers, have invested their retirement nest eggs in high yield and high risk investments.

A recent study by the Securities and Exchange Commission and FINRA, the two national regulators of the securities industry, shows that brokers are selling high commission, complex and risky products to their elderly clients, according to a recent article in industry newspaper InvestmentNews. Those products include: variable annuities, structured products, non-traded REITs and other so-called “alternative” investments.

SEC and FINRA staff “are concerned that broker-dealers may be recommending unsuitable securities to senior investors or failing to adequately disclose the related risks,” according to InvestmentNews which cited the report.

If FINRA is investigating a firm and sees that the misuse of investment funds involves the elderly, as in a recent case, “that’s going to be a red flag on top of a red flag,” according to a compliance executive who was quoted in the article.

The hard truth is that many elderly investors need yield to sustain their lifestyle and cannot afford the loss of irreplaceable funds which were earned during their working years. Their financial advisors know this and must take care not to risk depleting elderly clients’ funds.

The situation is dire. A recent CNBC report reveals that, among the oldest Americans, one in five goes broke before they die.

“Based on surveys repeatedly pointing to dismally low levels of retirement savings, most American households have reason to be concerned,” according to CNBC. “The latest report on how many Americans die broke comes from an analysis by the Employee Benefits Research Institute based on data from the University of Michigan’s Health and Retirement Study.”

“Of those 85 or older who died between 2010 and 2012, roughly 1 in 5 had no assets other than a house, according to the analysis,” according to CNBC. “The average home equity was about $140,000. Roughly 1 in 8 of those households had no assets at all.”

Another recent study by an MIT economist found that 46% of Americans had less than $10,000 in financial assets in the last year of their life.

Regular readers of this blog know that many investment fraud attorneys have elderly investors as clients; we file claims on their behalf seeking to recover their retirement savings lost by reckless brokers. While the financial services industry is not responsible for the lack of savings of many Americans, it can do better when it comes to protecting their nest eggs.

For example, the financial services industry could embrace the fiduciary standard of care that the Department of Labor is currently constructing to better protect workers’ 401k(s) and other retirement accounts. Sadly, much of the industry is fighting that proposal, worried that it will open the floodgates of consumer lawsuits and complaints when investors are sold the wrong products.

Such a stance is sad and shows little or no respect for the people who need their money the most: the elderly.

Zamansky LLC are investment and stock fraud attorneys representing investors in federal and state litigation and arbitration against financial institutions.