This article is concerned with something that I believe to be of EXTREME importance. It’s focused on teaching you how to help protect yourself from unscrupulous, or even criminal, advisors who are looking to take advantage of you, or of someone you love.
Four Simple Steps to Vet a Financial Professional
I wish it weren’t true, but, as detailed in my new webinar, “Lies, Levies and Lawsuits,” the reality is that some people spend tremendous amounts of time, money, creativity and energy, all with the sole intention of ripping you off. For these people, living within the rules of society, or the law, isn’t desirable.
What follows are four simple steps for vetting a financial professional, and to, ideally, put as much distance between bad, or criminal advisors, and you.
1) Run a BrokerCheck Report
FINRA, the Financial Industry Regulatory Authority, oversees the people and firms that sell stocks, bonds, mutual funds and other securities. You can run a check on just about any financial professional through FINRA’s website at http://brokercheck.finra.org.
No matter whether you are just beginning to interview advisors, have been with the same investment professional for decades, or even if you are a client of Hanson McClain, I encourage you to go to http://brokercheck.finra.org today. Through this website you can find criminal records, liens, lawsuits, judgments, tax information, and client complaints, along with up-to-date information about the credentials and securities licenses they’ve earned.
2) Conduct a Google search
3) Ask to review your prospective advisor’s credentials
How many years has your prospective advisor been practicing? Is her or she a CFP® (CERTIFIED FINANCIAL PLANNER™)? A CFS®? A ChFC? An accountant? Or are they actually someone with no formal education or relevant credentials whatsoever? You deserve to know.
Start with BrokerCheck, and then follow that up by asking them directly what credentials and degrees they have. If what they tell you doesn’t match up with what you find out about them from BrokerCheck, then they have some serious explaining to do.
Remember: When it comes to your money, never give anyone the benefit of the doubt. Make them earn it.
4) Only work with a fiduciary advisor
A fiduciary manages your assets on your behalf. This means that they must always and only make recommendations that are in your best interests (as opposed to what is best for them). I believe you should work with a fee-based advisor as opposed to a commission-based advisor who makes his or her income by selling you products that you might not actually want or need.
For more information, as well as a wider range of tips, ideas and tools for protecting yourself, and your hard-earned money, be sure to listen to my latest webinar, “Lies, Levies and Lawsuits,” or you can go to www.moneymatters.com, where there are additional educational resources and materials.