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Be
Careful. You have entered the world of the Financial Cynic.
In the Financial Cynic’s domain the nonsense,
hype, and sales pitches are stripped away from the usual ‘too good
to be true’ presentations given by many ‘financial advisors’
to leave a realistic picture of what you need to know.
The purpose of this site is to provide the information and resources you
need to enable you to protect yourself from an unscrupulous financial
advisor. Hopefully, the information contained in this site will help you
level the playing field, and reduce your chances of having someone with
an impressive sounding title and letters after their name take advantage
of you. Remember ‘The
Emperor’s New Suit’
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A
considerable number of people are preyed upon every day by unscrupulous
agents, brokers, and other flavors of ‘financial professionals’
who use a surprising number of psychological techniques and official sounding
‘certifications’ to portray their credibility as ‘trustworthy’
experts.
The financial services industry plays a vital role in helping people plan
their retirement and financial affairs. Many people receive great advice
from honest advisors, whether they are insurance agents, stockbrokers, or
other forms of financial advisors.
Take some time and wander through this site. Visit the links to outside
resources, or check on the ‘homework’ section to see if any
of the items would be helpful to you and your family or business situation.
BONUS
ADVICE!
A. Get It In Writing!
Be sure the advice you receive comes from someone licensed to provide
that advice.
- Accountants or attorneys who give insurance
or investment advice without a securities or insurance license
are breaking the law, even though they may mean well.
- Are they giving a personal opinion, or
professional advice?
Chances are they will not put their advice in writing.
- If they are not properly licensed, their
Errors and Omissions Insurance will not pay any claims you
may file against them for the quality of their advice.
- If they are licensed, are you receiving
unbiased advice that is in your best interest, or are they
just cashing in at your expense?
Do Arthur Anderson & Enron come to mind?
- Beware of people that are not attorneys selling
Living Trusts: Many are come-ons to sell expensive/overpriced
insurance products with horrendous penalties for early termination,
to say nothing of a poor Trust that may not meet your needs.
Check any licenses
or ‘professional’ designations
- CPA = Certified Public Accountant; licensed
to practice accounting by each state. Strict Ethical and Compliance
Standards.
- ESQ = Attorney; licensed
to practice law by each state. Strict Code of Ethics and Compliance
Standards.
- RR = Registered Representative;
licensed and monitored by the SEC and NASD. Strict Ethical
and Compliance standards.
- RIA = Registered Investment
Advisor; licensed and monitored by the SEC and the NASD. Strict
Ethical and Compliance standards.
- ‘Financial Planner’
= No state licensing or educational requirements. Some ‘certifying’
companies sell mail-order courses and tests, and claim ‘codes
of ethics’ which are unenforceable by any governmental
agencies.
- ‘Certified’
= Impressive-sounding designation used to make ordinary descriptions
sound important. Think of a ‘certified used car’:
It is still a used car…..
- Verify the status of licenses and certifications
with the appropriate State and Federal regulatory agencies.
You will be able to learn how long your financial advisor
has been practicing, and if any violations of rules or laws
have been committed.
B. Things your financial advisor cannot
control:
- Real Estate – Commercial
or residential
- Debt Retirement – Reduce
your bills or accelerate your mortgage
- Hobby – Antiques, art
or other
- Insurance Products –
Life insurance or annuities; trans-generational legacies
- Charitable Giving –
CRUT/CRAT or outright gifts; social capital, or mini-foundations
- Long Term Care Insurance
– Protects your other assets from health and medical expenses
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