All too often, I hear about some financial advisor who was taking advantage of clients, and although it seems that it should be difficult to do, the sad truth is that it's not.
If a skilled financial professional wants to mislead or take advantage of someone the chances are very high that they will be successful in doing so.
I think it's important for people to understand that not all advisors are working in their client's best interest. It might be as blatant as stealing, or as subtle as misleading them in some way.
Without a doubt, most of my financial professional peers are very committed to caring for their clients' needs, but over the last four years I have taught thousands of local financial professionals in my Business Ethics course, and I can tell you that although as a profession we are very good, we do have our bad apples.
One simple way to evaluate an advisor would be to ask if they are acting as a fiduciary. This is a heightened level of commitment and requires the person to be working as, or with a Registered Investment Advisory firm which is above-and-beyond what most advisors do.
Another way is to ask for a copy of their ethics pledge, or how they incorporate ethics into their practice. Chances are, if they have a written ethics code, or are very willing to talk for hours about how they incorporate ethics into their practice they are on the right track.
Wolf Wealth Advisors Ethics Pledge
We will always commit ourselves to protect and promote the interests of our clients, and will always conduct ourselves in a way that reflects well on our profession.
We will be totally honest when explaining our education and business backgrounds, professional designations, and years of industry experience.
We will be completely truthful by not exaggerating the realistic returns or future value one can expect from any product, transaction, service, or investment that we may recommend.
We will always disclose the important features of a product, transaction, service, or investment and disclose potential risks that may negatively affect future performance or value.
We will always consider both our client's current and future needs to determine the proper suitability of any recommendations that we may make.
We will respect the confidentiality of any information entrusted to us, or obtained in the course of our business or professional activities.
We will only use sales presentations and advertising materials, including product illustrations that are completely accurate and compliant with state and federal regulations.
We will always provide our clients with copies of all required documents that relate to the product, transaction, service, or investment that we have recommended to them.
We will always refer our clients to a more specialized professional advisor when their needs go beyond our current license or expertise.
We will consistently educate ourselves as to the new laws and regulations in our industry, and we will always act in good faith toward those we serve.
If you have any questions about this column, don't hesitate to call me, this subject is a passion of mine and I love talking about it.