Want the Inside Scoop on a Financial Adviser? Then Find Out How They’re Regulated

You’ve read the headlines: about Bernie Madoff-style Ponzi schemes robbing investors of their savings; about people who call themselves “financial advisers” but are in reality product-peddling salespeople, neither qualified nor authorized to provide financial advice; about individuals who claim they are working solely in your best financial interests when really they’re putting their own interests and financial gain first.

As positive a force as the right financial professional can be in a person’s life, for providing a roadmap to connect people to their goals, for helping individuals and families to set priorities and navigate financial challenges, and for providing a personalized plan designed to both protect and grow assets, negligence and bad actors are an unfortunate reality in the financial services world. It is therefore critical that consumers gain assurance that the professional with whom they are placing their assets and their trust is who they say they are in terms of their professional qualifications and expertise, that he or she and his or her firm always play within the rules, and that ultimately they will always put the best interests of you, their client, above their own.

That assurance comes in large part from the regulatory agencies and organizations that have been entrusted to enforce the rules, regulations and laws designed to protect consumers of financial products and services. “People see the job title ‘financial adviser’ and automatically assume the advice that person is giving them is in their best interests,” says FPA member and CERTIFIED FINANCIAL PLANNER™ professional Josh Nelson, founder and CEO of Keystone Financial in Loveland, Colo. “As much as we would hope that’s the case, it’s not a given. There are people out there who I call ‘financial assassins,’ who bill themselves as a ‘financial adviser’ but in reality are misrepresenting themselves and what they do.”

A little knowledge about how financial professionals are regulated can go a long way in helping to identify and avoid those bad actors. Here are five areas where that knowledge can be particularly valuable:
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