Tips to Prevent Financial Fraud By Your Advisor
1. Do not sign over power of attorney, typically called a discretionary account , to your advisor. Doing so is catnip for a not-so-ethical advisor.
2. Regularly meet with your advisor to discuss your financial plan. If you have questions, ask, and don’t be afraid to get the answers in writing so you have it on file as a record.
3. Request monthly or quarterly financial statements so that you’re 100% comfortable with where your money is invested. If the advisor is being “secretive” about his investment strategy, don’t just walk away, run as fast as you can.
4. Don’t write your investment checks directly to your advisor directly. Checks should be made out to the brokerage firm, such as Fidelity Investments or Charles Schwab.
MoneyTrack Tip: Check, Check, Check
- Check the advisor’s background
- Never write the investment check directly to your broker
- If use an advisor, make sure to check in with them several times a year!