To aid consumers and thwart thieves, The Certified Financial Planner Board of Standards recently released ?CFP Board of Financial Self-Defense?. In the guide, Elanor Blayney, the CFP Board?s consumer advocate, points out common fraudulent techniques or red flags used by unethical advisors. This is not small change, according to the Elder Financial Planning Network.? Seniors have lost $2.6 billion to financial mismanagement or abuse.? Blayney?s red flags are not hypothetical but real-life events. She describes the typical set-up, the pitch, and illustrates how consumers can protect themselves.
Sometimes scams involve a colleague from work. One galling case involved a thief named Kenneth Wayne McLeod who in addition to posing as an advisor falsely claimed he had a degree from the University of Georgia. McLeod even brazenly claimed his dog was a descendent of Uga. Hell will not get hot enough for him. His targets of opportunity were not UGA alumni (too smart) but ironically were retired federal employees, primarily law enforcement agents. As one victim explained, ?Cops trust cops?.
Affinity fraud practitioners like McLeod target specific ethnic or religious communities and professional organizations. His ?special? bond fund turned out to be little more than a classic Ponzi scheme. Authorities found McLeod dead of an apparent suicide.
Rogue advisors like alleged Ponzi scheme operator Harrison H. Jones, 61, of the Financial Planning Center of Panama City use the lure of high returns as bait. Jones operated a 12 percent Savings Club where investors ?earned? 12 percent annually. Jones? Ponzi scheme fleeced around 90 investors for a grand total of $6 million.
Be alert if an insurance agent recommends replacing an existing variable annuity with another one complete with a surrender charge/hefty new commission. For instance, as beneficiary of her husband?s IRA, a client?s mama could have kept the annuity she inherited. However, the agent tried to convince the widow to buy another annuity complete with a 10 percent bonus (the hook). In reality, the only way she would get the 10 percent bonus was to annuitize the contract ? something she will never do in a thousand years because she wants to leave the IRA to her sons.
If you don?t understand an investment ask questions until you get an answer. If you don?t get a plausible explanation hire someone else to evaluate the investment. If no explanation is forthcoming, don?t invest. Finally ask if your advisor is acting as fiduciary, where they must put your interest first. For other tips and to see other red flags download the guide at www.CFP.net/financialselfdefense/ .
Feed any thief posing as a financial planner to the sharks. Let me throw out the chum.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@LivingstonFinancial.net.
Sometimes scams involve a colleague from work. One galling case involved a thief named Kenneth Wayne McLeod who in addition to posing as an advisor falsely claimed he had a degree from the University of Georgia. McLeod even brazenly claimed his dog was a descendent of Uga. Hell will not get hot enough for him. His targets of opportunity were not UGA alumni (too smart) but ironically were retired federal employees, primarily law enforcement agents. As one victim explained, ?Cops trust cops?.
Affinity fraud practitioners like McLeod target specific ethnic or religious communities and professional organizations. His ?special? bond fund turned out to be little more than a classic Ponzi scheme. Authorities found McLeod dead of an apparent suicide.
Rogue advisors like alleged Ponzi scheme operator Harrison H. Jones, 61, of the Financial Planning Center of Panama City use the lure of high returns as bait. Jones operated a 12 percent Savings Club where investors ?earned? 12 percent annually. Jones? Ponzi scheme fleeced around 90 investors for a grand total of $6 million.
Be alert if an insurance agent recommends replacing an existing variable annuity with another one complete with a surrender charge/hefty new commission. For instance, as beneficiary of her husband?s IRA, a client?s mama could have kept the annuity she inherited. However, the agent tried to convince the widow to buy another annuity complete with a 10 percent bonus (the hook). In reality, the only way she would get the 10 percent bonus was to annuitize the contract ? something she will never do in a thousand years because she wants to leave the IRA to her sons.
If you don?t understand an investment ask questions until you get an answer. If you don?t get a plausible explanation hire someone else to evaluate the investment. If no explanation is forthcoming, don?t invest. Finally ask if your advisor is acting as fiduciary, where they must put your interest first. For other tips and to see other red flags download the guide at www.CFP.net/financialselfdefense/ .
Feed any thief posing as a financial planner to the sharks. Let me throw out the chum.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@LivingstonFinancial.net.