John Fawaz, Financial Expert walks through the steps of Financial Self Defense.
1) Check your financial planner’s background:
- Go to Finra.org
- This is a great resource for every investor. FINRA is a not-for-profit organization authorized by Congress to protect America’s investors. On the website there is a link “BROKER CHECK” where you can do a free background check on your advisor see if there have been lawsuits or complaints
2) Understand your advisor designations.
- People spend more time planning a vacation than planning for retirement. If you are going to hire financial planner make sure they are a “Certified Financial Planner” Some designations only require an hour or two of studying. Some you attend a 2-3 day conference. You don’t want to place your livelihood in someone that is not knowledgeable.
3) Understand what license your advisor holds:
- Those with “Series 7” can offer most investments products like Stocks, Bonds, Mutual funds, etc. Those with “Series 6” can only offer mutual funds. Those with only insurance licenses can only offer insurance products like annuities. Ideally you want those with “Series 7” because they are not limited on the offerings. Finra.org will list the advisor Licenses.
4) Never make check to Advisor..
- Check should be made to broker dealer, insurance company or custodian of your assets like, merry lynch, LPL, Schwab etc. If an advisor asks you to write a check in his or her name that should be a red flag.
5) Make sure you receive regular statements from independent third-party sources, not just from your advisor –
- You can avoid by using an advisor that uses a reputable company.