"Investment adviser's scams took millions" front page of today's METRO section. "Defendant pleads guilty; many victims worked for Fairfax schools." I read the article just now. In every case, the "scam" involved moving money (from this to that). The (as it turns out) victims trusted and believed. In my opinion the individual "investor" (for retirement, in retirement) needs to have a lot more trust in themselves and believe themselves. I wrote personal response:
don’t know if
This guy was NOT your average small-time skimmer. He defrauded his own family and managed to gain access to NSA (National Security Agency) databases (you know, the people that like to listen on cellphone calls).
"....In a statement of facts filed with his plea agreement, Parker admitted to conducting four distinct fraudulent schemes since 2006:
So much fraud would be eliminated, a la Bernie Madoff, if consumers knew the first rule of using a financial advisor:
Rule #1: NEVER, EVER, should you write a check to the advisor!
The reason? No advisor should ever actually HOLD your funds. A financial institution or licensed brokerage should be the agency wherein your funds are invested. Independent advisors, for example, use commercial reputable firms, such as Associated Securities/Bank of NY, or Charles Schwab, etc. That institution is who you make the check(s) out to.
Yes, you can pay an advisor's fees with a check, but 98% of people don't unless they're professional executors/trustees. Fees can always be deducted from your brokerage account and most advisors prefer this, unless they're only working with you on an hourly basis.
Advisors manage your portfolio. They do not hold assets. Zip. Never. Nada.
Not surprising this sleazebag picked on the elderly. My own MIL would be a prime victim; she trusts everyone who smiles at her. Needless to say, between her dementia and naivete, we're the ones who work with the CFP to handle her money.
I did not learn in kindergarten Everything I need(ed) to know. My father (who died 1988) in his dementia gave a "loan" and lost more than $30,000 - which my mother (seven years younger) would never be able to recover (a penny) and I (relative to a close friend from another continent) managed to give a "loan" which cost me and my spouse $16,000 plus the interest (including repaying $11,000 principal) on our son's part of that amount. Fortunately this (circa 1993) experience pointed me to the road where I / we would be able to risk through years and years in no-load low-fee mutual funds, IRA, Roth IRA, 403(b) and such. Thank you for your strongly stated information, which helps me at age seventy.
As our son wrote when he was quite young: "risk and reward are brothers" (these days we would say "are siblings").
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