You have a financial advisor who influences or controls your planning and investment decisions. Your financial future depends on the quality of the advice and services that are provided by the advisor. Bad advice has dire consequences: Deferred retirement, reduced standard of living during retirement, and financial insecurity late in life.
What if your financial advisor is not the expert he purports to be? What if he lied to gain control of your assets? How would you know before it is too late?
How Do They Get Away With It?
Fake advisors are salesmen who get away with it because Wall Street has made you solely responsible for determining the quality of financial advisors.
- Anyone can claim to be a financial planner or a financial advisor
- There are no mandatory disclosure requirements
- There are no lawsuits if you make a bad decision
Do Not Assume
We can warn you, but it is up to you to protect your financial interests. Do not assume your advisor is an ethical, financial expert. There is a 75% chance you do not know everything you should know about your advisor. That’s because the advisor controlled the information you relied on to make your selection decision.
It is up to you to know three critical differences between real advisors and fake advisors. Once you know the differences you can avoid advisors who make deceptive sales claims to gain control of your assets.
1. Real advisors are Registered Investment Advisors (RIAs) and Investment Advisor Representatives (IARs). These registrations permit them to provide financial advice and ongoing services. Salesmen have securities licenses (Series 6, 7). These licenses limit them to selling investment products. Some advisors are IARs and they have active securities licenses.
2. Real advisors are compensated with fees for their knowledge, advice, and services. Salesmen are compensated with commissions by third parties (mutual fund families). You should pay fees so you control your advisor’s compensation. You can stop the advisor’s compensation if he fails to meet expectations.
3. Top quality advisors document key information for their credentials, ethics, business practices, and services. They practice full disclosure because they have nothing to hide. Salesmen make undocumented sales claims that make them sound like ethical, financial experts. They do not document claims because they have a lot to hide. You should trust what you see, not what you hear, when you select an advisor.
If a current or prospective advisor does not meet all three criteria, he is a salesman masquerading as a financial advisor. He used deception to gain control of your assets. How do you trust anyone who uses deceptive sales tactics?