I’m probably going to scare you a little bit right now. I apologize in advance. It’s truly not my intention, though if it makes you more cautious in a healthy way, I’m good with that. So what am I scaring you about today? Corrupt financial advisors. Look, it happens. Financial advisors are humans which means at least a few of them are bad seeds.
The stories of deception and fraud I’ve heard over the years are grotesque. Lives ruined. You can read some of the horror stories in my Indy Star column from this week. But the real point of this post isn’t to voyeuristically retell the stories of criminal financial advisors, it’s to prepare you for the fact it can happen and that you kinda just have to get over it. Yeah, working with an advisor is important enough to take the risk. For many people it’s the difference between retiring and not retiring.
What I’ve noticed over the years is how all fraudulent financial advisors have two qualities in common. Most obviously they are deceitful, but secondly, they are really good at their jobs. These advisors are the rockstars. The award-winners. The best in their firms. They are the ones recommended when you call up a firm and ask for their best advisor. I find this is the most disturbing part of the whole mess.
Working with an advisor is an important part of a healthy financial life, and getting to a place of trust with your advisor takes time. Trust is a huge part of the client/advisor relationship. Yet, trust shouldn’t supersede vigilance. Continually keep an eye on BrokerCheck to keep yourself knowledgable about who you are putting your future in the hands of.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.