Spot Shady Financial Planners A Mile Away
No one wants to be scammed, especially when it involves money. You should be able to trust your financial advisor, but there are many skeptical advisors in the business. They have a suspicious history, lack credentials, and charge excessive fees. Before you get too involved, review these three warning signs of a shady financial planner.
They Don’t Have A Regulatory BodyAnyone can advertise as a financial planner, but legitimate advisors are registered with a regulatory industry body. Referred to as the Financial Industry Regulatory Authority (FINRA), the industry body oversees brokers and regulates fee-only advisors. To check if your financial advisor has a regulatory body, go to FINRA’s BrokerCheck, which identifies if they have any disciplinary actions against them. The website also provides information about their experience and qualifications. For fee-only advisors, refer to the SEC’s Investment Adviser Public Disclosure webpage. If your advisor isn’t listed on any of these websites, they may not be a legitimate financial planner.
They Lack CredentialsYou should trust your financial advisor. After all, they discuss your investments, retirement plans, estates, taxes, real estate, etc. This personal information should be handled with the best professionals. Review your advisor’s credentials. Check to see if they have one of three certifications:
- A certified financial planner (CFP), completed after taking college-level financial planning courses, three years of experience, and a 10-hour examination.
- A chartered financial consultant (ChFC), earned after studying insurance, estate planning, retirement funding, and investments.
- A chartered financial analyst (CFA), specializing in security analysis, stocks, bonds, investment management, and corporate finance.