Most of us could use some help with managing our hard-earned cash—that’s where a financial planner comes in handy. They’ll give you advice to help your money grow & secure your financial future. Unfortunately, not everyone out there has your best interests at heart. Some of them may be pulling a fast one on you. Here are twelve signs that your financial planner is doing just that.
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Unregistered Investments
Someone trying to sell you a car that isn’t registered sounds fishy—it’s the same with investments. If your financial planner is pushing investments on you that aren’t registered with any financial authority, you should be wary. Legit investments need to be on the books to make sure they’re above board.
Guaranteed Returns
No matter what your financial planner tells you, there’s no such thing as a guaranteed high return with investments (guaranteed safe returns are usually very low). They might promise you the moon—but chances are that they’re trying to take you for a ride. Real high return investments come with risks. There are no guarantees and that’s one of the reasons investing is so difficult.
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High Fees for Vague Services
Whenever your financial planner charges you high fees, they should make it clear what you’re getting in return. After all, how else will you know what you’re paying for? There’s no reason for them to be vague about what they’re doing for you. If that happens, then it might be time to ask some difficult questions.
Frequent Trading
You should regularly check and monitor your bank account activity. Some planners make trades to rack up commissions for themselves rather than to benefit your portfolio. This is known as churning & it can seriously damage your funds over time. Worse, it shows that your planner doesn’t have a long-term strategy for your finances.
Pressure to Make Quick Decisions
Never allow your financial planner to pressure you to make quick financial decisions. Why? Because good advice & good opportunities don’t need to be rushed. Dodgy planners will use this to prevent you from doing your due diligence, leaving you no time to think or consult with other people. A reputable planner will encourage you to take your time.
Complex Strategies That Are Hard to Understand
Finances certainly are complicated—but your financial planner should try to make it easier for you to understand. Anyone who doesn’t might be trying to confuse you on purpose. After all, it’s a planner’s job to break it down for you to make sure you’re fully informed about where & why they’re investing your money.
Lack of Regular Communication
Communication is important to any good relationship—including the one with your financial planner. They should give you regular updates about your money, including how your investments are performing and any changes in strategy. You should feel comfortable reaching out. Silence or sporadic updates don’t cut it.
Unauthorized Transactions
Finding transactions you didn’t approve of in your account is a major violation. Your financial planner should always get your approval before making any moves with your money as unauthorized transactions are unethical. They can also be illegal! Investing without consulting you is a complete breach of your trust.
Inconsistent Statements
You should be able to understand and trust your financial statements completely. At best, inconsistencies suggest your planner has made some mistakes—at worst, it means they’re deceiving you. Either way, you have to deal with it immediately by asking them for clarification. If they can’t give you any, then you should reconsider who’s handling your finances.
Avoidance of Questions
Similarly, when you ask a question, you expect an answer—so there’s no excuse for your financial planner to dodge your questions or change the subject when you ask for details. That’s a warning sign. They should be able to answer your questions clearly & directly. After all, it’s your financial future and you have every right to understand every part of it.
Promises of Exclusivity
Being told you’re getting an exclusive deal can make you feel special—but be careful. Any investment opportunities that seem too good to be true probably are, especially if your planner claims they’re not available to the public. Get a second opinion. Genuine investment opportunities withstand scrutiny and won’t be merely “exclusive” to attract investors.
Refusal to Provide Credentials
You wouldn’t let someone without a license drive your car—so why let someone without proper credentials handle your money? They should be confident about their qualifications & happy to show them. They’ve worked hard for them, after all! Any planner who can’t or won’t provide these is someone you should stay away from.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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