Planning your f🔯uture often requires turning to a financial advisor whom you can trust as a fiduciary for guidance on personal investing, college trusts, income tax preparation, insurance, retirement planning, or estate planning.

Most financial advisors strive to help their clients invest their money in areas that generate rich returns because they themselves tend to accrue commission on the pos🎐itive returns. The more money financial advisors can make for their clients, the more money they are able to make for themselves.

However, there are certain practices that some fin❀ancial advisors may partake in that can effectively cheat their clients. If you are worried that your financial advisor may be ripping you off, here are some warning signs to look for when trusting your financial advisor with your money.

1. Commingling Names onꦓ the Title of the Account

If your financial advisor 澳洲幸运5官方开奖结果体彩网:commingles or adjoins their name alongside yours on the title of your investment account, it grants them unrestricted authority to use the funds at t🃏he🍷ir discretion.

Ensure all the statements you receive from the custodian have only your name appearing on the account. The code of ethics for the Certified Financial Planner (CFP) Board of Standards outlines commingling as a violation of the U.S. 澳洲幸运5官方开奖结果体彩网:Securities ꧙🌺and Exchange Commission’s (SEC’s) Code and Practice Standards, whereby any violation warrants disciplinary action, such as potential revocation for the certificate holder to use the CFP certification marks after their name.

2. Churning on Your Account

If, on your statement, you notice a large number of trades occurring or an increase in transactions on your account without any substantial increase in value, your financial advisor could be churning on your account.

A financial advisor, or specifically a broker, does this to increase their own commissions, as they are usually paid whenever they buy and sell a security. A way to avoid churning on your account is to open a 澳洲幸运5官方开奖结果体彩网:wrap account, where a flat fee is charged periodically instead of ꦑone based on trade transactions.ꦐ

3. Scamming

If your financial advisor tells you of an investment that offers you a high return with low risk, and you instead notice your returns are staying pretty consistent, your investment could be tied into a 澳洲幸运5官方开奖结果体彩网:Ponzi scheme, whi🅷ch generates returns for 🌌former investors by using the funds from newer investors.

Moreover, Ponzi schemes are often a part of 澳洲幸运5官方开奖结果体彩网:affinity fraud, which entails inflicting the scam upon🌸 members of certain groups, such as an ethnic community, religious community, or older adults. To avoid t💧his, confirm that your investments and financial advisors and their respective firms are registered with the SEC (since the majority of Ponzi scheme investments involve unregistered firms).

4. Embezzling

If your financial advisor insists you play a minimal role in your investments and let them deal with the “burden” of your account, since it is their job, they likely want to obtain from you a power of attorney🐓 to act on yo♉ur behalf for decisions involving your investments.

This opens up great risk for the safety of your assets, since yo🔯ur financial advisor is then able to legally trade upon your securities and move the return or the security itself into any account they choose.

To your greater detriment, your advisor could also transfer your money into their personal accounts. Although this act is illegal, it is costl🐭y and time-consuming for you to pursue after the fact.

To avoid this happening, never grant power of attorney to your advisor. But if you must, stipulate in a power of attorney agreement that upon granting power of attorney, your financial advisor is only permitted to trade your securities without notifying you but never permitted to draw upon returns or move ass꧙ets from their original accounts.

To protect your 澳洲幸运5官方开奖结果体彩网:investments, be cau꧒tious when entrusting your money to others. Always validate your financial advisor’s credentials, background, and ethics record.

The Bottom Line

There is always going to be inherent risk in trusting your money with another person. Financial advisors are meant to take care of your money, but it doesn’t mean they will always have your best interests at heart. Pay attention to the above signs regarding your financial advisor to know if your hard-earned money iಌs in good hands.