If you think it's no problem to pick the right financial advisor, consider this: The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and the National Football League (NFL) are working together to assist incoming NFL players spot and avoid investment fraud and begin their professional careers by making informed financial decisions. Participants will learn how to choose the right financial professional and how to do a background check, as well as the risks of taking on debt.
Here's one for you--an update on the collusion between an attorney of questionable ethics and Canadian-based TD Bank.
TD Bank has settled the largest lawsuit filed against it by investors of Ponzi schemer Scott Rothstein, attorneys confirmed Friday in federal bankruptcy court. Terms of the deal have not been disclosed, but two sources with knowledge of the settlement told The Miami Herald on Friday that the settlement amount was more than $100 million.
The case involves disbarred attorney, Scott Rothstein. who is serving a 50-year prison sentence after pleading guilty to running a massive scam involving investments in phony legal settlements that imploded in 2009.
The scheme was one of the largest frauds in South Florida history and triggered the failure of the once high-flying Fort Lauderdale law firm Rothstein Rosenfeldt Adler. Testimony and court documents show that Rothstein used an account at a TD Bank branch as an integral part of the scheme. Conspirators in his scheme allegedly posed as TD Bank employees, and one of Rothstein's associates devised a fake TD Bank website on which fake account balances were posted for investors.
"This bank was integral to the fraud, and the fact is that it could not have succeeded without their active participation in the Ponzi scheme," Mandel said. "TD Bank was Rothstein's partner in crime."
Re: I have a good one also
tokyogai
2/22/2012 5:28:29 PM
I have been lucky and careful and have not yet made a mistake.
Re: I have a good one also
chapAnjou
2/22/2012 4:53:55 PM
"I agree in general, but sometime the choice is just wrong and it is better to acknowledge that fact rather than wait for a bad outcome."
I agree with yalanand in regards to tokyogai. Sometimes, most times, hindsight is the only thing that gives you the information you need to determine if a choice was a good one or not. Unfortunately, this means that you learn your lessons through bad outcomes...the real trick is to just not invest as much up front and build a trusting relationship with your advisor. This way, if things do go south, at least it's at very little financial risk to yourself.
Question for you guys: have any of you made any poor choices regarding financial advisors? If so, what would you suggest other ppl did differently?
Re: Wolves and sheep
chapAnjou
2/22/2012 4:48:48 PM
"What's even stranger is that even with all of the things that have gone down in the last few years with investor scams and schemes, it still doesn't seem that the perception has changed at all with how we look at advisors. You would think that these things would make people more skeptical like car salesmen."
Very valid point. It could just be a case of the thinning of the herd. The smart ppl, the ones who follow investment news, they might be the ones that are not getting screwed over by poor financial advice. The people you read about in the news could simply be the people that are learning the hard way and will tread much more carefully when dealing with advisors in the future.
Re: Wolves and sheep
chapAnjou
2/22/2012 4:46:31 PM
@erierunner
"But when you see all of the acronymns for advisors, etc. it is hard to tell who is who and how they got the designation."
I agree with what you're saying here to an extent, but I also feel that this mentality is the same one that Fred mentioned. Basically, if you're dealing with something as important as your money (especially large amounts of money usually given over to financial advisors), you should be willing to do the research.
To go back to what you said about MDs - just because someone has "MD" associated with their name, doesn't mean that one shouldn't do their due dilligence and learn more about this person. When looking for a new primary care physician, you don't just grab the 1st name you see, you do some research on the person. Or, even if you do go with the first person you see, I'm sure you don't just go to them with a life threatening issue, you go for a regular ol' checkup to determine what they're like and how comfortable you feel with them.
This is no different than how the relationship should be between an advisor and investor and something that Fred had mentioned.
Re: Wolves and sheep
chapAnjou
2/22/2012 4:40:42 PM
@Fred Goodman
"It is still clear that the responsibility for selecting people to help you should be taken seriously by those seeking service, and I would think one should ease into a relationship, perhaps starting with a portion of ones assets and increasing it as confidence is built."
Well said! A relationship between a seller and a buyer (whether it be goods or services) is just like any other relationship. It's not something that just materializes and suddenly both people trust each other implicitly...it's something that needs to occur over the course of time in order for that trust to develop.
Re: Wolves and sheep
erierunner
2/20/2012 4:59:26 PM
What's even stranger is that even with all of the things that have gone down in the last few years with investor scams and schemes, it still doesn't seem that the perception has changed at all with how we look at advisors. You would think that these things would make people more skeptical like car salesmen.
Re: Wolves and sheep
erierunner
2/20/2012 4:54:37 PM
Not only do they not check, they don't know what it means. It just becomes too complicated. Like when you see MD behind a name, you know they are a doctor, There's not much questioning it. But when you see all of the acronymns for advisors, etc. it is hard to tell who is who and how they got the designation.
In my years on Wall Street, I have known and dealt with A LOT of brokers. While I'm all in favor of the caveat emptor approach to investing, I also find a lot of truth in the views put forth by @chapAnjou.
Of course, there are the Bernie Madoff sociopaths of the world out there; unfortunately any profession has those. But the NON-sociopaths in the brokerage business are just salespeople, whose job is "smiling and dialing," especially at first when they are building their client bases.
Sales isn't for everyone, and it takes a lot of confidence and a thick skin to endure the rejection and objections that go with starting out, especially for a young person who may not ooze gravitas or have lots of country club connections.
I don't think that confidence in ones abilities is the same as setting traps. Brokers are taught to be confident and to discuss the research and the products of their firms with enthusiasm and conviction. That's the job--same as cars, same as insurance, same as Saks Fifth Avenue.
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