Don't get scammed.
One of the biggest threats to your financial security is the bad advice you could receive from a financial adviser or the investments you may make with that person or firm.
The Bernard Madoff case highlighted how important it is to do your homework, since many of the convicted swindler’s clients trusted him and never asked how their investments worked.
When it comes to investment fraud, "90 percent of cases could have been eliminated if investors just asked and checked," says Lori Schock, director of the Office of Investor Education at the Securities and Exchange Commission.
So checking out your financial adviser is critical.
A recent study by the CFP Board found more than half of certified financial planners have personally worked with an older client who has been subjected to unfair, deceptive or abusive practices when it comes to the financial advice they received or the financial products they were sold.
“Older Americans have already given many years of hard work and dedication — raising families, serving in the military, building businesses — all to become one of our most financially secure generations,” says CFP Board CEO Kevin Keller. “This survey reveals the pervasive financial abuse victimizing America’s seniors.”
It is not only older Americans who should be wary about financial adviser scams. The CFP Board, a non-profit organization that oversees certification for financial planners, suggests investors take specific steps to avoid falling prey to financial abuse.
Follow these eight rules.
By Sharon Epperson,
CNBC Personal Finance Correspondent
Posted Sept. 10, 2012