Bad Financial Advice Category

Your biggest financial risk is not the stock market. It is bad advice when you invest in the stock market. Bad advice causes you earn less in rising markets and lose more in falling markets.

By: Matthew Arndt, CFA, CPA, CFP | May 21, 2009 | Bad Financial Advice, Investment Performance, Wall Street Ethics, Who Can I Trust?

It is amazing that a bank can fail a stress test, be undercapitalized, and yet still impress shareholders. At least that is how it appears with the recent Bank of America (BAC) stock price rally. The share price of BAC has been on an upward tear following the announcement it will raise almost $13.5 billion [...]

By: Glenn Wessel, CFA, CPA, CFP®closeAuthor: Glenn Wessel, CFA, CPA, CFP® Name: Glenn Wessel
Member: Member Paladin
Quality Rating:
Email: gwessel@wesselinvestment.com
Site: http://www.wesselinvestment.com
About: After having graduated with a degree in Economics, I quickly realized that I was ill-prepared for the real business world. I read Venita VanCaspel's best-selling self-help book "The Power of Money Dynamics" and discovered that the financial advice put forth by insurers and other large institutions often ran contrary to the best interests of consumers. Emmulating the author, I earned the Certified Finanial Planner(TM) licensel. As useful as that program was, however, I was disappointed to discover that investment theory comprised a relatively small portion of this two-year program. Wanting to specialize in the investment arena, I undertook the rigorous Chartered Financial Analyst(TM) program where the topic of investments is studied in one fashion or another over the course of three years. I have worked in finance for some 20 years (even overseeing an insolvent S&L for a year in a previous banking debacle) and have taught undergraduate finance courses for Florida Atlantic University. I established an investment advisory practice in 2003 and have since obtained a CPA license to help assure that any advice I render is well coordinated with the tax code. On a personal front, I play guitar (blues) and am in the process of building a 600 horsepower musclecar (a '66 Fairlane). I enjoy riding fast sportbikes and have been a lifelong sprinter.See Authors Posts (3) | May 19, 2009 | Bad Financial Advice, Financial Advisors

To win clients, advisors must establish credibility. In lieu of experience, advanced degrees, professional credentials, or a proven track record, my seat-of-the-pants experience suggests to me that less scrupulous advisors are sometimes prone to raise the importance with which they are perceived by marketing themselves using their full names and suffixes.
For those of you who [...]

By: Matthew Arndt, CFA, CPA, CFP | May 14, 2009 | Bad Financial Advice, Financial Advisors, Illegal Schemes & Scams, Who Can I Trust?

Having suffered devastating losses, witnessed the Bernie Madoff scandal, and been forced to revise retirement plans for the worse, the greatest question for weary investors today is: Whom can you trust? Consider one of the most trusted groups of professionals, doctors; they must go through rigorous schooling and training and take the Hippocratic Oath in order to practice medicine. There are no parallel standards or code of ethics for financial advisers.

By: Matthew Arndt, CFA, CPA, CFP | May 11, 2009 | Bad Financial Advice, Financial Advisors, Illegal Schemes & Scams, Report Fraud, Who Can I Trust?

Summarized in a recent FA News (May 08, 2009) article, FINRA: Broker Deceived 64-Year-Old Nun, a financial adviser affiliated with a well-recognized financial institution swindled a 64-year-old nun, an elderly couple, and a retired widow out of huge sums of money. Besides being a truly despicable piece, it goes to show you that just because (or especially because) an adviser is affiliated with a household name, investors should not assume that he will be honest and act with ethical integrity.

By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@paladinregistry.com
Site: http://paladinregistry.com
About: Jack writes for the InvestorWatchdog website and Worth magazine. He worked in the financial services industry from 1976 to 2004. For twenty of those years he was the president of a Registered Investment Advisory firm and a Broker/Dealer. Jack is the author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor and is a co-founder of PaladinRegistry.com.See Authors Posts (87) | May 10, 2009 | Bad Financial Advice

Financial planners and financial advisors do not have track records. Consequently, it is impossible for investors to determine the results planners and advisors have produced for current clients.
This is no accident. When financial planners and financial advisors produce no documentation for their results it makes it easier for them to use personalities and sales skills to convince [...]