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Proceed With Caution

A study highlights the importance of researching financial planners

If you’ve ever used LetsMakeaPlan.org to find a financial planner, beware of what the site doesn’t tell you. A new report from The Wall Street Journal found that the site, which is operated by the CFP Board doesn’t include consumer complaints, criminal histories, or financial problems for the advisors it lists.

The Journal’s researchers analyzed more than 72,000 profiles on LetsMakeAPlan.org for the purposes of the study. It found that 6,300 advisors had informed the site operators of bankruptcy filings, consumer complaints and more, yet the site did not include them. More than 5,000 of the planners the Journal flagged have had formal client complaints filed against them regarding investments or sales strategies. Hundreds of other planners had been punished by financial regulators or been fired by brokerage firms over alleged misconduct. And more than 100 of the planners have faced and/or currently face felony charges.

In the aftermath of the Journal’s report, the CFP board created an independent board to review and update its disclosure policies. However, it’s still a good reminder to vet any financial planner before hiring them. Ask trusted friends for recommendations. Consider the cost, your budget and their qualifications. Check their Form ADV β€” a disclosure document that all money pros must file with the government β€” for their fee structure, strategies and any disciplinary actions/consumer complaints. Use FINRA’s broker check tool. Do plenty of research. You don’t want to hire someone that you can’t trust.

Chris O'Shea

Chris O'Shea