Prevent Financial Abuse

  1. Trust, but always verify. Ask your adviser to provide services with the “duty of care of a fiduciary.” Identify the organizations that license or supervise him, then check their Web sites for his background and disciplinary history, if any.

  2. Never leave blanks on paperwork, and always ask for final or submitted copies (with the word final or submitted stamped right on them).

  3. Ask whether your investments are regulated or supervised by third parties.

  4. Make sure you receive regular statements from independent third-party sources – not just from your adviser.

  5. If you invest in limited partnerships, real estate, or non-traded securities, verify that the investment manager is audited annually by a reputable independent accounting firm.

  6. Always make your checks payable to the adviser’s business or custodian – not the adviser herself. Question any situation that gives your adviser unlimited access to your money.

  7. Take your time before any decision—and don’t make major decisions just after a life change, like a divorce or the death of a loved one. Find a trusted family member or friend to help in reviewing or making the decision.

  8. Ask your adviser to list the pros and cons of each investment idea. If you hear only the pros, you’re not getting the full story.

  9. Understand how your adviser earns her pay. She should disclose any conflicts of interest—actual, potential, or perceived—that might affect her recommendations.

  10. Before agreeing to any transaction, carefully consider the charges you’ll incur and the timing involved.

  11. Understand your investments. Ask if you don’t understand, and get a second opinion if necessary.

  12. Designate a trusted friend or relative to handle your investments in case something happens to you.

Find a good financial planner or adviser

To find a financial planner or adviser in your area…

  • www.LetsMakeaPlan.org
  • www.fpanet.org/PlannerSearch/
  • www.napfa.org (click “Find An adviser” on the left navigation panel)

Check Background

To check the background of a financial planner or adviser. Some of these resources may also tell you about your adviser’s employment history, disciplinary record, and registrations.

  • www.CFP.net/search
  • www.finra.org/brokercheck
  • www.adviserinfo.sec.gov

To file a complaint…

Start by taking your complaint directly to the adviser and the management of your adviser’s broker-dealer or investment adviser. If you fail to get a satisfactory response, then contact the agencies below.

If the complaint is about:

  • a broker or securities product (such as stocks or mutual funds), contact:

    • The Financial Industry Regulatory Authority (FINRA):
      www.finra.org/Investors/ProtectYourself/p118628
    • Your state securities regulator:
      www.nasaa.org/QuickLinks/ContactYourRegulator.cfm

  • an insurance salesperson or product (such as insurance policies or annuities), contact:

    • Your state insurance commissioner:
      https://eapps.naic.org/cis/fileComplaintMap.do

  • an investment adviser or investment advice, contact:

    • The U.S. Securities and Exchange Commission (SEC):
      www.sec.gov/complaint.shtml
    • Your state securities regulator:
      www.nasaa.org/QuickLinks/ContactYourRegulator.cfm

  • a CFP® certificant, contact:

    • CFP Board: www.CFP.net/learn/complaint.asp

In a Nutshell
In all these cases, simply just SPEAK UP. Follow the above tips and try to avoid financial abuse before it occurs. Don’t make a decision right away. Do research. Ask family and friends.

Source: Certified Financial Planner (CFP) Board of Standards, Inc.

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