This financial advisory firm claimed it could help you avoid taxes and shift your debts to the U.S. government. It was a scam. Read about it here:
How does an advisor deliver accountability when they are dealing with a element [Markets] that are uncontrolable and unpredictable? Sure it’s difficult , but not impossible. When anyone aquires any type of service, they want the other party to deliver some form of accountability for the services/products delivered. The financial services industry should be no different. The excuse used is always the same-” I cannot control the markets”, “markets go up and they go down”.
Although these are true statements, financial advisor’s need to go to the next level and at the very least deliver accountability in the advice they provide by reporting on the ongoing status and performance of the investments they recommend. Advisors need to help clients understand why thier investments do what they do when markets are up, down, or sideways. The problem lies in the in the fact that most so called advisors do not have a clue as to why thier recommened portfolios do what they do and performing the way they are performing in any market condition.
How about providing performance statements for any account, anytime? How about being able to show a client what he has invested , what has been added, and exactly where he/she is at today. The industry , promoted mostly by the large brokerage houses hide behind the fact that they do not need to provide this. They say that all they neeed to provide is the monthly custodial statements. I am sure evryone out there agrees that these statmenst can be very confusing at best and does not provide the bottome line information that most investors want[ what have I contributed and what is my performance as of today?.
The industry needs to do a better job. So next time you talk to your advisor, ask him/her, “How are you providing accountability for the advice you have provided to me and my family?”. If you don’t like the answer, then start interviewing.
I found this artcle to be very interesting. In order for Morgan Stanley to continue perpetuating thier practice of serving clients while maintainng thier army of brokers they have taken the following action. Even though brokers are looking to serve thier clients in a different fashion, MS will take action to not lose the revenue at all cost. Read this and enjoy.
This type of action continues to show all of us that the responsibility of qualifying a competent and trusted Advisor to work with still resides with the individual. The investor needs to educate themselves on how to decide on what type of advisor to work with. Investors need to ask questions, review certifications, review investment philosphies and more. Investors need to advocate for themselves today more then ever as demonstrated in this article. These type of criminals believe that if you work for a big brand name that is supposedly trusted, then no one will ever ask questions that may uncover thier fraudulant activities.
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“About.com” is a website that advocates for consumers through education to assist them in solving all types of problems. The article that is referenced by the link below does a great job in clarifying the difference in two types of Investment Advisors. It also references ” Paladin Registry” as a good resource. Enjoy.
There continues to be growing evidence that as the recession continues, more fraudulant activity will become increasingly evident. Scam and schemes will not be sustainable as the economic infrastructure continues to feel pressure. The following link to the most recent article is only one of many to come. http://bit.ly/Q3iE8
My advice to all individual investors continue to be ” if it’s too good to be true, it probably IS.”
Here is an issue that should raise a red flag should your financial advisor ever approach you with it. It is a fact that during very difficult and uncertain financial times, individuals are more susceptible to scams and fast money making schemes. Of course there are always a few ideas, no matter what type of times we are in, that have some credibility but never the less require extensive due diligence.
Ok, here is the latest red flag on my radar. I recently took on a new client from another advisor. Aside from the normal reasons for considering this change, the client sense of urgency increased when his previous advisor started to approach he and his wife about a "multi level" marketing business opportunity. Yes, you heard me right, the advisor presented to this client a multi level marketing campaign that promised easy and long lasting stream of revenue with minimum work on their part. I could not believe what I was hearing. I was absolutely astounded by this. What was this advisor thinking about? One would think that in these very uncertain times, when you get the opportunity to sit with your clients that you would focus on reassuring them of strategies that you have put in place for them to keep them on course for their future goals. I won’t talk about the name of this multi level campaign because it really doesn’t matter. What really matters is that this type of action on an advisors part should tell you a couple of things. One, if he is spending time on this, then what kind of time is he spending on helping his clients stay and keep on track in the new and ever changing environment that we are in? Two, if he is approaching his clients with this, is he having difficulty keeping his client base and urgently looking for another business to go into? Oh, by the way, I do not think that any compliance department in the country would allow an advisor to use his influence over his clients to engage them in another business that the advisor has an "upline" financial benefit in.
This story just hit the news wires. The link http://www.fa-mag.com/fa-news/4513-broker-charged-in-massive-ponzi-scheme.html will take you to the complete article by, FA Magazine, a industry publication.
Read the article and see the lessons learned.
If you’re age 50 or older, you should take special care when buying living trusts. Your age group is often a special target of salespersons whose goal is to sell you something without carefully analyzing your needs.
It’s easy enough to become a victim. Living trust sales are a growing area of consumer fraud. Con artists make millions of dollars every year selling unnecessary trusts. Each year, thousands of consumers lose from $500 to $5,000 through the purchase of living trusts. Often, families face potentially greater costs after the consumer’s death, resulting from problems associated with the trusts.
To protect yourself, follow these guidelines:
1. Take time when making your decision. Do not fall victim to high-pressure “act immediately” sales tactics.
2. Seek the advice of someone trustworthy and knowledgeable. Contact your accountant, estate planning attorney, banker or financial advisor.
3. If you conclude that a trust may be right for you, deal directly with a licensed attorney who has substantial expertise in estate planning. If the attorney is board certified in estate planning and probate law, then he or she is presumed to have this expertise; though, he or she does not need to have this designation to be qualified to do your estate planning work.
I recently attended a continuing education seminar for insurance and securities licensed representatives and happen to be sitting at a table with a group of insurance salesman turned investment advisor. During the CE session as well as lunch, a group of them from the same office happen to talk about their latest and very successful commission producing sales ploy. I asked a couple of questions and these individuals were more then happy to share with me how it goes, they were actually proud of it.