Valenti Hanley PLLC

What are some signs that my financial planner is up to no good?

One of the reasons people let financial planners manage their investment portfolio is because they believe that they're trustworthy as they're licensed by the state. They often belong to professional organizations that have high ethical standards that they must meet as well. There are always bad apples in the bunch, though. If they take certain courses of action or exhibit questionable practices, you may want to reconsider your decision to work with them.

If your financial planner promises that they have unique expertise that will help them get a leg up on the market, then this should raise some concern. Those who know the market have become adept at the pricing of securities and when new information drops, it often spreads fast. Markets tend to adapt quickly to changes. It's very difficult for any one planner to gain unique insight that another hasn't heard already.

You should also be wary of a smooth-talking financial planner who seems to want to dominate the conversation instead of giving you a chance to explain your investment goals. They may be talking a lot in hopes that you won't ask them critical questions.

If a financial planner isn't clear about how they'll get paid, then this may also raise red flags. If they tell you that they are a fee-only advisor, then you'll want to find out if you'll be expected to pay a percentage of the assets they manage. If they're contracted to work on a fee or commission basis, then you'll want to have them clearly describe what you should expect of them in exchange for that amount.

A financial planner who suggests holding meetings outside of those covered by your agreement may want to do so to bill you more fees. An advisor who pressures you to buy may be looking to make additional funds off of you as well. If you're working with someone who's inexperienced or claims to know everything, then that may be a sign of problems too.

When an individual decides to work with a financial planner, they don't want to simply preserve their assets, but instead, grow them. If you suspect that your current advisor isn't looking out for your best interests, then you may want to consult with a Louisville securities law and litigation attorney who can advise you if you should pursue proactive legal representation against them.

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