Give Your Financial Planner a Check-up

Ever wonder why Bernie Madoff, perpetrator of the world’s largest Ponzi scheme, didn’t get caught by auditors at the SEC sooner?  There were a lot of reasons, but a big one is that he wasn’t even registered as an investment advisor with the SEC.  You can’t oversee what you don’t control – or not well.


Anyone can hang a shingle and call themselves and investment advisor.  Kind of like Lucy the Psychiatrist in the Peanuts comics.  Investment advisors don’t need to sign themselves up for oversight.  It’s only a problem when they get caught.


As numerous busted Ponzi schemes have shown us, the agencies in charge of protecting the public are understaffed and don’t even have time to keep track of who is voluntarily registered, let alone who isn’t.


What is so surprising is how many wealthy people were sucked into Madoff’s FOMO marketing scheme and didn’t even bother to look to see if he was a legitimately registered investment advisor.


It’s so easy!  If you are thinking of turning your money or trust over to anyone, the most basic research you can do is look them up on the Finra BrokerCheck tool Using your advisor’s name or firm name, you can see if that person has signed up to be monitored and any past complaints.  Here’s what it looks like (the top part, at least):



If you click on the Detailed Report link in the upper right corner, you get a PDF of the report.


If you can’t find your advisor or potential advisor’s firm or name anywhere in the system, walk the other way.  Choosing not to be registered is a huge red flag that someone doesn’t want the authorities to know what they are up to.


Finra BrokerCheck is not like Yelp.  It only shows if the advisor has been the subject of complaints, lawsuits, or arbitrations.  There is never anything nice written about an advisor here, only the negative.  Don’t be put off if you don’t see glowing reviews.  Good news is not allowed, just the bad stuff.


As you are looking for an advisor, don’t forget the most basic step.  Make sure who you are talking to has a legitimately registered investment business.



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