Financial Advisors Are All Frauds

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repcover0209.jpgThat's what you would believe if you just read the papers, watched the news, surfed the Internet.

In February we warned readers of The Madoff Effect, Bernie's massive fraud has undercut the hard-earned trust you built with clients--and will hasten a regulatory overhaul. Okay, the regulatory overhaul is still in the works --- the intentions of the SEC and FINRA are not known. (Of course, many lobby groups, such as SIFMA, ICI, NAPFA and the Consumer Federation of America have issued position papers on how financial services companies should be regulated from now on.) But the Madoff Effect is alive and well. In the April 11-12 (Satuday/Sunday) issue of the Wall Street Journal, columnist Jason Zweig offered up a primer to retail clients on how to "improve your odds" of beating financial advisors and their firms in arbitration. (Click here, but subscription required.)

And this past Saturday, the New York Times "Your Money" columnist Ron Lieber wrote, "A Personal Brush With Investment Fraud," in Saturday's edition. Lieber writes about his own financial advisor who, his firm alleges, had absconded with some client money. (The advisor's attorney says his client has not been charged with any crime and would like to resolve the matter in a way that "satisfies everybody.") Oh, the accused advisor did NOT rip off Lieber, but Lieber does note that the accused FA (his firm disassociated itself from the financial advisor in question, stating there were "certain irregularities in a limited number of client accounts") did profess to be a fiduciary, and is a member of the National Association of Personal Financial Advisors, a respected group. While we should presume the FA's innocence until the case is adjudicated, boy, the news is almost all bad when it comes to the profession of financial advice these days.

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