Gold IRA, rare coin sellers find a home with inexperienced investors

investmentnews.com:

Investors in their golden years have increasingly been targeted by precious metal and collectible coin providers — a trend that state regulators, lawyers and financial advisors say needs to stop.

This month, numerous states signed on to a bankruptcy plan for Lear Capital, a precious metals firm that has been accused of encouraging customers to move assets out of retirement accounts and into gold while not being forthright about the fees it charged. That deal, which includes $5.5 million in restitution for thousands of people, is the latest episode in a long trend of precious metals brokers marketing to an audience that observers say is particularly vulnerable.

That is exemplified by affinity marketing, with precious metal and coin providers focusing intensely on conservative media outlets. A recent investigation by the Washington Post found that right-wing media viewers have been highly targeted by politically charged ads, leading many low-income retirees to buy unregulated, high-commission products at the expense of their 401(k)s or IRAs. Stations including Fox News and Newsmax have regularly aired such ads, according to the report.

Politically affiliated marketing “resonates with people,” said Patricia Vannoy, a partner at law firm Mattson Ricketts who regularly represents clients in cases involving financial products and services. “They’re emotionally invested in something, and they want to follow that.”

However, those pitches often may not address the fundamentals of the investments, and the viewers usually have little understanding of them, Vannoy noted.

Phone representatives at gold sellers might also have few, if any, qualifications and limited understanding of the products, she said.

“You don’t have someone who’s