Why You Should Be Checking on Your Financial Adviser

Consumer protection, Money, Tips & how-to

Did you know that any person can call himself or herself a financial adviser? Not only are they not required to be registered, they are not even required to have a set of specific qualifications. So how can you protect yourself and avoid investment losses?

Here are some potential warning signs to watch for:

  1. They suggest that you liquidate a majority of your investments and put them into a new product such as a variable annuity, on which they stand to make very high commissions.
  2. They promise high and unrealistic returns on their products and promise that your investments will be safe.
  3. They avoid describing their fees or explaining the process of how they make money.
  4. They tell you that you need to pay in advance or to make a check out to their name instead of an organization.
  5. They promote free seminars and events and then advise you to act quickly. Remember while they may be free, those seminars are still sales pitches.

So what can you do? Here are some tips:

  1. Check your broker’s qualifications. Ask to see their certifications, and whatever they claim, be sure to check them out.
  2. Ask for references of longstanding clients who you can contact.
  3. Be sure to find out exactly how your broker earns his money. Ask if they are fee based or if they earn commissions? Do they receive a bonus for selling a certain type of investment? It is okay for your broker to make a commission as long as you know what is going on.
  4. Ask if your broker is registered with state licensing bodies, FINRA or the SEC. Again, check these claims out for yourself.
  5. Ask if your broker has ever been the subject of formal complaints, or sued by a regulatory body or client.

Remember, no matter how much you may trust your financial adviser, it is your money and your future which are at stake. Always keep a close eye on your investments and take quick action if you suspect things are not right.

If you feel you have been the victim of financial fraud, the Carlson Law Firm can help. We offer a free review of your case and can help you with investment loss recovery and to avoid investment losses. Carlson Law (619) 544-9300 or reach us at Carlson Law Firm.