How to Obtain Protection from Phony Advisors – the Ask First Form

According to Protect Yourself: Ask First!, help4srs.org, 2007, while some financial advisors are perfectly legitimate and have their clients’ best interests in mind, others may provide sub-standard services and have hidden financial motives.

The California Attorney General recently cracked down on one company that was giving estate planning advice, and selling living trusts to Older Adults in California.*** [T]he company would find out all about an Older Adult’s finances and investments as part of the living trust planning process. Then the Older Adult would be approached to buy annuities, after selling or exchanging their existing investments. Annuities can generate significant up-front commissions for the seller, and over $200,000,000 of annuities were sold this way.***

This growing problem points out the need to know, in advance,

• if the new advisor has legitimate professional credentials,
• if the person will serve as a fiduciary and put your interests first, and
• how the new advisor gets paid.

H.E.L.P. has developed the Ask First! form as a tool to help you.*** Using the Ask First! form, you ask the advisor to disclose in writing his or her credentials and ways of being paid. Keep a copy of the form handy. Use Ask First! at the beginning, before you start a relationship with a new advisor.***

Special thanks to Neil E. Hendershot, Esq. (Attorney at law, Goldberg Katzman, P.C., Adjunct Professor, Widener University School of Law) for bringing this article to my attention.

You can read more on this issue on PA Elder, Estate & Fiduciary Law Blog.