For those looking towards retirement, here’s how not to be Madoff(ed)

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February 07 2021 05:30 pm
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KANSAS CITY, Mo. -- Bernie Madoff. It's the name that strikes terror in retirees.

The name Madoff will forever be linked to his elaborate Ponzi scheme that resulted in thousands of people losing millions of dollars.

It was a tragedy that provided important lessons for the rest of us on choosing a financial adviser worth your money and your trust. Andrew Stafford, chief operating officer of Lawing Financial, said it's important for investors to trust their instincts.

"If it's something in your gut that doesn't feel right," Stafford said that's a feeling you should trust.

Stafford also warns against choosing any financial adviser pressuring you into an investment beyond your comfort level. He said financial advisers also should be able to answer your questions about how much money they are making from your investments.

It's an important conversation to have, and here's Stafford's suggestion on how to bring it up.

"Hey this investment that you are recommending, how does that look like? How are you paid on it? How does it fit in our overall plan?"

Investors should remember that the Trump administration is expected to roll back fiduciary regulations that were supposed to take effect in April, and would have required financial advisers to put their clients' interests above their own self interest. Although that federal regulation looks like it may disappear, many firms have their own fiduciary code -- so ask to see it.

There are some red flags that every investor should be aware of when choosing an investment adviser. The biggest one is when someone's pushing an investment where the return is too good to be true. Steer clear. That's what Bernie Madoff's clients wish they had done.

Finally, experts like Stafford say it's safer to stick with financial advisers who work in national firms. A big firm provides third-party oversight -- something missing in many family run operations.



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