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When it comes to Picking a Financial Planner, Choose Wisely: By WealthTrust Arizona

In today’s uncertain economic climate, more and more of us are worried about how we are going to pay for retirement. In fact, a new study shows that one-third of adults of all ages say that running out of money is their top retirement concern. While most of us have been hit hard the last few years, Baby Boomers who are the closest to retirement will be affected the most, because they will have the least amount of time to rebuild the nest eggs ravaged by the recession. That means larger numbers than ever are going to be seeking the advice of financial professionals

While Wall Street malfeasance and several criminal cases (the highest profile one being Bernie Madoff’s Ponzi scheme) have scared off some people, investors should not be discouraged. The Securities and Exchange Commission filed a record 735 enforcement actions in the 12 months which ended September 30, and there is no shortage of sound, unbiased investment advice for those willing to seek it out. “The vast majority of investment professionals are hard-working individuals who look out for the interests of their clients and customers," says Gerri Walsh, vice president of Investor Education at the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States.  

There are some guidelines to keep in mind when you are looking for a reliable broker, advisor or financial planner. 

Here are some common mistakes consumers make when looking for someone to invest their money: 

Not having due diligence when it comes to checking out the background of a prospective financial professional. Do not rely entirely on friends who say their planner “is a good guy”.  Do your own research. 

Placing too much emphasis on professional designations. Having a wall full of diplomas and a business card filled with acronyms does not mean a person should be trusted with your money. Those things can all be faked. 

Not understanding the investments you buy. Financial products are so much more complex than they used to be, even some brokers cannot explain them. If you do not understand how it makes money for you, what fees and commissions or costs you have to pay, then you should not be investing in that particular investment.


Here are some persuasion tactics you should avoid:
Affinity fraud. This type of fraud occurs when con artists prey on members of a certain race, nationality, religion or other group. Because most people feel they do not have the time to fully research investments, they will often rely on a fellow member of their particular group, in an attempt to lower an investor’s guard. For example, Bernie Madoff, who is Jewish, was able to prey on friends and acquaintances who were also Jewish. 

Reciprocity. In this case, a con artist will offer a small favor, hoping it will lead to a payoff for him. In one ubiquitous scam, senior citizens are invited to a free lunch seminar which includes information and sales pitches. 
Securities regulators looked at more than 100 of these free meal seminars and concluded that half of them contained claims that appeared to be exaggerated, misleading or unwarranted investments. A good percentage appeared to involve fraud, according to FINRA.

Scarcity. We have all been there: a pushy salesperson creates a sense of urgency, urging you to sign on the dotted line to take advantage of a limited-time offer or price. The idea is that if you do not act quickly, the opportunity will be gone, and you should invest quickly. 

Here are some steps to finding a good financial planner:
Know what your goals are. While for most people, the fundamental goal is to have enough money to assure a comfortable retirement, others may want to provide investments and assets for their heirs. Professionals can help you with investment products or tax and estate planning.

Do comparison shopping. You should look for professionals who seem to appear to align with your goals and then look into their backgrounds. There are several ways you can do that. For example, you can use BrokerCheck, a tool on FINRA’s website ( BrokerCheck allows you to search for brokers and their firms which are currently or previously registered with FINRA to learn about their education, where they have worked previously and whether they have a history of disciplinary actions or complaints.

Cast Your Vote. You also can get information from your state securities regulator and from a website which was launched this year, BrightScope Advisor Pages ( This site lets consumers easily search for advisors by city, comparing characteristics which are important when shopping for an advisor, as well as making public disclosure data accessible.

If you are considering a financial planner, a good overall resource is the Certified Financial Planner Board of Standards website ( which allows you to search for planners using criteria such as specialization and compensation. The site also tells you if a planner has been publicly disciplined by the board.

Interview advisors. You should be armed with many questions when you meet with an advisor. Many consumers are embarrassed to ask for more details or a better explanation.  FINRA suggests consumers strike a non-confrontational, yet firm, tone, using phrases such as, “Back up one second and bear with me. How exactly does this work? Exactly how does this make money for me? What exactly are the risks? What exactly will I have to pay to own this investment?”

FINRA has what they call a risk meter and a scam meter. Walsh says that if investors had run Bernie Madoff's investments through their scam meter, they would have seen some red flags.

Here are some suggested questions you should ask a prospective financial planner:
• What experience do you have?

• What are your qualifications?

• What licenses do you have?

• What products and services do you recommend?

• Will you be the only person working with me?

• How are you compensated? For example: Do you charge a flat hourly rate (or "à la carte" rate) for services? Is the fee a percentage of assets under management? Do you receive a commission or a referral fee paid by the product or service providers that you sell?

• What organizations are you and your firm regulated by?

• Will you provide a written agreement which details the services and fees that will be provided?

Of course, if you are considering WealthTrust Arizona, we welcome any and all questions you may have about our firm and the services we provide. We are confident that once you consider our years of experience and status as a leader in the field of wealth management, you will feel comfortable partnering with WealthTrust Arizona to help you meet both your short and long-term financial goals. 


DISCLOSURE:  WealthTrust Arizona is a fee based investment advisory firm that specializes in integrating portfolio management with estate planning for high net worth individuals and families. Services include portfolio management, estate planning, asset and lifestyle preservation, taxation concerns, access to trust and estate documentation preparation, business succession planning and more. The professionals at WealthTrust -Arizona are frequently sought out by the national media such as The Wall Street Journal, Forbes, New York Times, CNBC, BloombergRadio, and others to share their thoughts on matters that impact our clients.

Given the recent events impacting investors and their financial security, we would welcome the opportunity to provide a second opinion for anyone who would like to have a check-up on their investments, financial plan or estate plan. If you know of anyone who may have a concern with their current advisor or current investment portfolio, we encourage you to share our contact information with those that could benefit from a complimentary review. 

Advisory services offered through WealthTrust Arizona, a registered investment advisor. WealthTrust Arizona does not engage in the trust business in the state of Arizona or in any other jurisdiction. Not FDIC insured. Not bank guaranteed. May lose value, including loss of principal. Not insured by any state or federal agency.


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