The jaw dropping antics of Wall Street firms and executives the last few years has shown us all a few things. For one; NEVER trust any financial adviser no matter what their reputation is, without first doing an exhaustive financial background check. This may sound harsh, but simply look at Wall Street’s recent history. For two; greed really knows no bounds, and I bet you would even make some questionable decisions if enough money was handed over.
Despite the financial turmoil, the billions of dollars lost, Wall Street executives don’t give a damn about their country or anyone in it. Below is a quote from the Associated Press about the billions of dollars in personal benefits Wall Street executives have siphoned off: “WASHINGTON – President Barack Obama issued a withering critique of Wall Street corporate behavior, calling it “the height of irresponsibility” for Wall Street employees to be paid more than $18 billion in bonuses last year while their financial sector was crumbling.
“It is shameful,” Obama said from the Oval Office. “And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.” Now if you are thinking about hiring a financial adviser Jeff Sonn a Wall Street fraud attorney recommends that you do a background check no matter how well you think of the prospective adviser. In other words, even if he/she has been advising your family for the past 20 years, you might want to make sure you haven’t been working with a Bernie Madoff.
- Get the heads up on your broker before you ever meet with him or her, and make sure they haven’t been sued previously. This can be done at the FINRA and SEC websites. However, don’t assume the best if they have a clear record. Make sure you utilize PACER, the U.S. electronic court records system to see if any federal lawsuits were previously filed against the broker. The cost for PACER info is $0.08 per downloaded page and anyone can set up an account.
- Get an account with a database company that can do research on your broker. It may uncover lawsuits or bankruptcies that you missed.
- Go to your local courthouse and do some research to make sure there have been no lawsuits. You could even check divorce records for information about finances.
- Ask the broker how much money they have under management and about any past lawsuits or arbitration. It also helps to create a written financial plan around income and expenses, as well as objectives.
- Find a financial planner or broker that is fee-based. You don’t want someone that will charge commission for every trade. The typical rate per year is 1% of assets.