5 Signs Your Financial Advisor May Cheat You

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The revelations of Allen Stanford and Bernie Madoff made us to carefully think about our financial advisors. It is quite unimaginable that your financial advisor will cheat on you; in reality, he or she is really capable of doing such. Nevertheless, it is not safe to generalize that all financial advisors are cheaters because there are a bunch of them who are honest and hard working people too. As a financial investor, you would not want to learn your lessons the hard way. If you have hired a financial advisor, you have to understand that you are still responsible for your financial stability in the future. Before hiring the services of a financial advisor, you should be wary of the possible signs that your financial advisor may cheat on you and ruin your economic future. 

· The Big Spender - You may want to do a little background check regarding the lifestyle of the financial advisor that you wish to hire. It was revealed that financial advisor Bernie Madoff lives an extravagant lifestyle. He owns several properties all over the world and he does not mind spending thousands of money for private jets. This is the first sign that you should look out for.

· The Philanthropist – Aside from luxurious lifestyle, your financial advisor could be hiding behind the mask of a good-hearted philanthropist.  Again, Bernie Madoff gave huge amounts of money in several foundations and even gave a donation to the Democratic Party. On the other hand, Allen Stanford donated money to various universities. It is okay to help other people if your financial advisor is using his/her own money, but it is totally a different story if he/she is using your money to make him look like a generous person.

· The Excuser – If your financial advisor never seems to run out of excuses for not fulfilling your requests, this is not a good sign. If you requested for a simple fund statement and it took him/her a long time to provide it to you, this is surely a red flag. You are in big trouble if there is a delay in giving you money. Your financial advisor must be doing something behind your back and you will not be happy about it.· The Magician – You have to remember that your financial advisor can do some magic to make your books look better. Your financial advisor can make the losses disappear and make your books appear as if everything is okay with your investments. It is better to do your own investigations and verify your returns. Looking at the percentage of the returns is not enough, you should be able to see how much money you have made with your financial investments. You should not get fooled with the returns shown in your books because a little magic can be done.

· The Business Person – There is nothing wrong if you financial advisor is a business person, but if it involves cloudy business practices then it is not a good sign too. Find out if immediate family members are the ones in-charge of bookkeeping because they can easily conceal the truth. Both Madoff and Stanford got their partners involved in the business as their respective bookkeepers and they also helped in the recruitment of new investors.

Sometimes it helps to be a little paranoid especially when it comes to financial investments. Some people may think that investors are stupid for not seeing the signs that their financial advisors are cheating on them. It is not a case of stupidity, these investors were too trusting and did not get themselves involved with their investments. They have left the responsibility of monitoring the investments in the hands of their financial advisors. Unfortunately, some financial advisors would take full advantage of the trust given to them and would use the money of their clients. Caution and involvement are the some of the things that you have to keep in mind when hiring financial advisors.

Irina Carter contributes towards Short Term Loans website. She loves covering business and finance news. She likes doing web development and web design.

Is a Financial Advisor Group Right For You?

Financial planning and making investments is something many people dread, whether in a small business or their personal life. However, to make a decent return on your money, these are necessary evils. 

Before fretting over stock splits and mutual funds, though, ask yourself a simple question: Do I have the time, knowledge, and expertise to manage my funds? Or would it be better left to professionals? 

Helping with Retirement: Will You Have Enough Saved?

Will I have enough money to retire? That's a question faced by millions of Americans. If you aren't the type of person that keeps track of where every penny you make is spent or you have trouble saving, then a financial planner could be a perfect fit for you.


Likewise, if you own a small business but have difficulty dealing with your balance sheet, net income statement, or cash flows, then a financial advisor will be a benefit to you. They can help you go over the numbers to make a profit and save money. 

Investment Knowledge: Do You Know How to Manage a Portfolio?

Market knowledge is a key element in any investment portfolio. Do you have the know-how to balance and manage your stock and bonds without losing money? If the answer is no, then financial advisors can help you meet your monetary goals. Always look at advisors' track record and certifications and make sure they're legitimate.

Long-established advisors such as the Fisher Investments Private Client Group, for example, have a successful history that speaks for itself. That way, you can take the headaches out of whether to buy or sell, or which stock is going to be the next hot buy. 

Saving Time: Are You Willing to Sacrifice Free Time?

When it comes to managing your investments, remember that it's a full-time job. It requires you to check your investments and market conditions on at least an every other day basis.

So ask your yourself: Do I really want to spend what little free time I have sifting through stock quotes and financial statements? That's why advisors are a great fit for those with demanding jobs and families; so you can keep your free time available for doing what you love. 

Achieving Goals: Do You Know What Your Goals Are?

If you don't have a firm grasp on your financial future -- i.e. what to buy, how much to buy, how much you need to earn, etc. -- then finance professionals can help. They can help you set your financial goals, which is what many overlook.

Retirement aside, do you need extra capital for your business? Do you need to put your kids through college? Do you want money for a down payment? All these are pertinent questions that your advisor will help you answer. 

Overcoming Adversity: What risks are Involved?

With the many Americans still struggling from a rollercoaster economy, the ability to assess risk in your investments is important. By hiring a financial professional, he/she can advise you on the degrees of risk of your portfolio. By taking this advice, you can make more sound financial plans, and avoid losing heaps of money in a down market.

While hiring a financial advisor may not be the best plan for everyone, it certainly comes with many benefits, especially for those who are a little less market-savvy. Remember, when choosing a financial advisor, make sure to find one that you're comfortable with and that fits you.