Recently, I caught a story on the local news, a financial planner at out of my hometown, West Frankfort, Illinois, was arrested for violating that trust. He had been a financial advisor for many years and recently was just charged with financial exploitation of the elderly. In one instance, he had gone to one of his clients and was trying to sell her an annuity. She trusted her advisor and considered him a friend and wrote him a check. A check directly to him, not the insurance company, in the amount for $20,000 and then he disappeared. As it turns out, she was not the only client that had been taken advantage of.
Financial Planner Violates Trust
When I see story like this, I’m angered because I love my profession, I love what I do, and I love earning my clients’ trust. But when you have individuals as such; that abuse that sacred trust with their client, it gives my profession a bad name. You may be wondering if this could happen to you.
What To Do If Your Financial Planner is Crooked
- If the advisor asks you to write him a personal check, that is a clear red flag. Never, never, write out a check directly to the advisor. Especially, if you are purchasing some kind of investment product.
- If you recently purchased something but never received anything in the mail, call your advisor and see if you can get a copy of the confirmation ticket.
- If your advisor is guaranteeing an outrageous rate of return, be extremely cautious. I ran into a competitor that was guaranteeing 12% return on his mutual funds he was offering.
Background Checks On Your Advisor
Start by thoroughly researching any broker, financial planner, or adviser you are considering hiring. Explore the North American Securities Administrators Association Website, www.nasaa.org, or call 888-84-NASAA for a regulator in your state.
State regulators, along with the National Association of Securities Dealers, jointly maintain a database of more than 650,000 stockbrokers and 5,000 securities firms. Known as the CRD, or the Central Registration Depository, the database contains critical information, such as whether a broker has ever been sanctioned or fined for investor wrongdoing. To check CRD records, contact the NASD’s consumer hotline at 800-289-9999, or visit the regulatory arm of the NASD online at www.nasdr.com and use NASD’s “Broker Check” system.
Securities offered through LPL Financial, Member FINRA/SIPC
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