Because it's Easy, Most Investors Research a Financial Advisor's History

Sadly this is a myth as evidenced by the EquiAlt scam perpetrated by the private real estate company in Florida.  Which should have been their first clue.*

The second clue would have been found by checking whether the sales people offering these securities were registered.  They weren't.

The third clue would have been found by checking whether the investments themselves were registered.  They weren't.

And, possibly, the fourth clue might have been one of the principals driving a $2.4 million car, a 2018 Pagani Huayra with a 764hp 6.0L V12 engine.  I had never even heard of this car until now.  I haven't figured out why but the crooks tend to spend their ill-gotten gains on such trinkets.  Could be that they know there is no favorable end game for them so they go for the biggest thrills and self-indulgences they can imagine.  I don't get it.

How can you avoid getting suckered and ripped off like this?  Here're a few tips:

1. Have a comprehensive written retirement plan that includes a cash flow plan and is built upon a reasonable rate of return.  This helps you from getting seduced by outsized promises.  Because every puzzle piece in your plan fits because there is reason and research behind it.

2. Check the licensing and regulatory history of anyone to which you provide detailed personal financial information and/or from whom you accept advice, including advice about moving your money or buying anything with it.

3. If investments or other financial products are recommended, check out the company and the specific investment, custodian, fund or insurance company to be sure they are registered in your resident state.  Here is Oregon's Division of Financial Regulation link.

4. Since there are plenty of states with reasonable homestead exemption limits, try to avoid companies in states with unlimited exemptions**.  This improves your odds.

5. Finally, simply ask the "advisor", "Are you a legal fiduciary?"  Then check the link in #2 to see if that is true.

Merry Christmas and Happy New Year to all.

Gary Duell

Your Constructive Comments are Welcome!

*Why do I say that?  Florida is one of several states that has an unlimited homestead exemption in bankruptcy as long as the debtor has lived in Florida for 40 months or more and their lot is a half acre or less in a municipality or 160 acres elsewhere!  By comparison, Oregon's limit is $50,000.  If you were a crook, which state would attract you?

**Kansas, Florida, Iowa & Texas.  Of course, a large well-established corporation won't benefit from this exemption anyway.