A common misconception far too many people have of financial advisors is
that they have the same legal obligations as registered investments advisors
and lawyers when this is not the case in many situations, even with the
partial implementation of the new fiduciary duty rule for retirement advice.
This is why it’s so important to keep a close watch on your financial
advisor’s actions and advice – if anything ever seems awry,
it may be in your best interest to cut ties and fire your financial advisor
before their actions cost you your life savings. Some key signs to look
out for include:
-Inability To Follow Directions: Financial advisors need to tailor their plans around your specific needs
– if your advisor consistently fails to take into account your clearly
stated future goals, you income flexibility, your risk tolerance, your
income level, etc., they could be putting your investments at risk and
potentially put you in a difficult and stressful position.
-Unwillingness or Inability To Explain Their Financial Actions: Understanding why recommendations are made, how your financial advisor
earns their paycheck, what types of commissions they receive based on
investments they make, and more are important things to know. If your
financial advisor in unable or unwilling to explain these areas to you,
there is a risk that you could be diving headfirst into a scam and need
to get out quick.
-Constant Sales Pressure: While putting together a strong sales pitch is key to acquiring new clients
and customers, there is a line between effective and aggressive. If your
financial advisor, or potential financial advisor, comes across as overly
aggressive and attempts to pressure you into certain investments, you
should be wary that they are looking to further their own goals ahead
of yours by hunting extra commissions or up-front payments.
-Promising The World: While hearing that your potential advisor has a surefire way to outperform
the market could sound enticing, it’s important to take these types
of promises with a grain of salt – or an entire bag – just
to be careful. A good financial advisor will tell you the truth about
what may happen, including the negatives. Honesty and trust are important
when you’re giving control of your finances to another person, and
if you hire someone who exclusively tells you the good while glossing
over the bad you could find yourself in a bad situation.
Our securities fraud attorneys at Meyer Wilson are committed to providing
our clients with the knowledgeable and experienced legal representation
they require in their time of need. If you lost money due to the wrongful
actions or reckless advice of your financial advisor, give our firm a call or
fill out our online form to give us the details of your situation and learn more about what we
can do to help.