Financial Self-Defense
Years ago I was approached by an attorney about a financial program he had developed which had a lot of potential for owners of some closely-held businesses. The strategy was not new, I had seen it before. But the manner in which the attorney approached this complex planning was well done and particularly appealing. The attorney wanted me to introduce his program to some of my clients.
As I did my due diligence, on two separate occasions the attorney said something which struck me as odd. The first time, I just let it pass. The second time I heard it I decided to look into it a bit more.
I approached some other people who I respect and who knew this attorney well. I explained that he had approached me with a concept which I was considering introducing to my clients, but that a couple of the statements the attorney made were bothering me. I asked them all, "How well do you trust him?" and everyone told me I had nothing to worry about. They assured me he was as reputable as he was brilliant.
After one of those meetings I came into the office the next morning and discovered a voicemail from the attorney and he was quite upset. He had discovered that I had been checking up on him, and he did not appreciate it. His voicemail was clear. He considered our relationship to be over and refused to work with someone who did not trust him unconditionally. Frankly, I was okay with that. My intuition and experience has taught me that only people with something to hide get upset when you check up on them. We never spoke professionally again.
This is not a fairy tale. I can't wrap this up in a bow and tell you that soon after that I was grateful that I never worked with him or that he committed some egregious act. The fact remains that he is a successful business person and a respected attorney with a fine reputation. He has close connections with some of my close connections. Yet I have never regretted our mutual decision not to work together. We all need self-defense mechanisms in place to protect ourselves. It is prudent to err on the side of caution.
Occasionally a potential client will question me about my credentials and background. I can sometimes tell that they feel uncomfortable asking and I try to assure them that their questions are legitimate and not offensive. I encourage their inquiries because there is nothing to hide.
Recently, the Certified Financial Planner Board of Standards Inc., the body that governs the CFP® certification, published a Consumer Guide to Financial Self-Defense. In the post-Madoff era, these 10 tips are a primer for what you must know and do to protect yourself from financial abuse.
Tip 1 is Do Your Homework: "Ask your prospective advisor to identify the organizations that license or supervise him. Brokers are regulated by FINRA; investment advisors by either the SEC or a state securities regulator; insurance agents by the state insurance commission in states in which they do business; CFP® professionals by CFP Board. Use these organizations' Web sites to check the advisor's background and disciplinary history, if any."
To make it easier on anyone, here are the places you can do a background check on me:
- FINRA Broker Check – it's free and you can search by name. I am listed both by my given name (Arthur) as well as my common nickname (Art).
- SEC Investment Adviser Public Disclosure – is also free. Search by name or CRD number (Central Registration Depository). I am CRD number 2096185.
- Licensee Lookup via the Iowa Insurance Division website – Search by name or NPN number (National Producer Number). My NPN is 1433330.
- Certified Financial Planner Board of Standards Inc. – Search by name and state for CFP® credentials
My mission is to make you comfortable with your financial decisions. I hope that making this information readily available makes you even more comfortable with your choice of financial planner.
Photo DSC_0055 by ichibankarate