Financial Answers "IN SIMPLE LANGUAGE"

We have all been touched in one way or another with situations like the Bernie Madoff multi-billion dollar Ponzi Scheme in which so many people lost most, if not all, their investments.  This type of financial advisor deception has caused tremendous hardships for a lot of people that were retiring or approaching retirement and it happens more often than you are aware of.

 In previous blog articles dated August 25, 2009 (How Well Do You Know Your Financial Advisor) and November 3, 2008 (Did You Do Your Homework?), I talked about how you need to protect yourself by knowing who you are dealing with.  Well that is easier said than done.  You can go to the FINRA (Financial Regulatory Authority Inc.) web page at www.finra.org and use their “broker check” system to find out such things as complaints against your registered financial advisor.  Or whether your financial advisor has any criminal convictions, liens or bankruptcies. 

The problem with the FINRA site is after two years FINRA doesn’t list the records of any registered representatives that have been suspended…meaning that the licensed representatives financial license i.e.: Series 7, 6 etc., was taken away from them.  

Why is this important if their licenses have been taken away from them and they can’t act as a financial representative anymore?  The problem begins with the fact that some of these representatives go to work for someone else who does not care or doesn’t check on whether they are properly licensed or not.  That means that you have no way of knowing whether this individual you are dealing with is legitimate or some dirtbag ripping you off.

 Honest, Hardworking Individuals

There are approximately 650,000 registered representatives in the United States and most are honest, hardworking individuals with the best interests of their clients first and foremost.  However, like every other profession on the face of this beautiful planet, there are those unscrupulous dirtbags that have only one thing on their minds…how to take advantage of and rip off as many people as they can.

So what can you do to protect yourself?  The first thing I would suggest is go to the FINRA website and see how it works.  Then I would contact FINRA stating that you would like to see them get rid of this “two year rule” and have the records of all present and past registered representatives become a permanent record that could be checked forever if necessary.  Or at least extend the accessibility of the registered representatives out, for say, at least ten years after their license is revoked or voluntarily surrendered because of an occupational change or retirement.

Do yourself a favor. Before you believe everything you read on the “FINRA broker check” site keep in mind that many times wrong or misinformation is posted to the wrong individual.  If there is something “adverse” about your financial representative listed see if you can talk to other people that also deal with your financial advisor and get their opinion.  If you feel that that is still not enough to make you feel comfortable than speak directly, face to face, with your financial advisor.  Listen to their explanation and watch their body language.  Then you can make a more informed decision if you want to continue doing business with this person or initially hiring this person to work as your financial advisor.  Do your homework.  Sleep at night.

This rule change would go far in helping to protect you from unscrupulous people that are trying to rip you off.  What do you think?

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