Today getting the right kind of financial advice is critical. While planning financially, most people depend on someone who’s called a ‘financial planner’. Once you have chosen your financial planner, this person becomes an important part of your life, helping you through various investments, insurance, taxes benefits, basically guiding you in achieving your financial goals.
But said so, here are a few extremely important things you must follow to ensure you are never cheated by your financial planner.
• Always make the cheques account payee only.
Always write your cheques payable to mutual funds, brokerage firms, or insurance companies. Never write a cheque made payable to your planner. Cross all cheques as account payee, write your name and the purpose of the investment on the reverse of the cheque, mention your cheque number and bank details in the application form.
• Do not have your financial planner as a joint owner or beneficiary on your accounts.
The only place your advisor's name should appear on documents is as the broker /distributor /agent of record, with their code. Also ensure that after you hand over a form, no additions are made to it. The easiest way to ensure this is to cross out all empty places in the form, before handing it over to the planner.
• Do not lend money to your financial planner.
At no point should your financial planner ask you for a short-term loan or use your financial information to support a cause of his own. Every planner is governed by a Code of Ethics and must maintain confidentiality at all times.
• Never sign a blank form or contract.
Cross out all empty sections, especially the ones that contain details of joint holders and nominees. Never sign a blank instruction for repayment or encashment of your investments. Many investors have lost their entire investments by signing blank instructions.
• Do not let your financial planner forge your name.
While you might think this could prove convenient, helping you save a lot of time, you are opening up to chances of fraud and even trouble with the law.
• Never let your financial planner use his address on your account statements.
See that it’s your address on the account statements, investment papers, etc. It is you who should receive the periodical statements directly from the bank, insurance company or brokerage firms, not your planner. Always insist on statements made on using proper firm stationery, not just a blank piece of paper.
But said so, here are a few extremely important things you must follow to ensure you are never cheated by your financial planner.
• Always make the cheques account payee only.
Always write your cheques payable to mutual funds, brokerage firms, or insurance companies. Never write a cheque made payable to your planner. Cross all cheques as account payee, write your name and the purpose of the investment on the reverse of the cheque, mention your cheque number and bank details in the application form.
• Do not have your financial planner as a joint owner or beneficiary on your accounts.
The only place your advisor's name should appear on documents is as the broker /distributor /agent of record, with their code. Also ensure that after you hand over a form, no additions are made to it. The easiest way to ensure this is to cross out all empty places in the form, before handing it over to the planner.
• Do not lend money to your financial planner.
At no point should your financial planner ask you for a short-term loan or use your financial information to support a cause of his own. Every planner is governed by a Code of Ethics and must maintain confidentiality at all times.
• Never sign a blank form or contract.
Cross out all empty sections, especially the ones that contain details of joint holders and nominees. Never sign a blank instruction for repayment or encashment of your investments. Many investors have lost their entire investments by signing blank instructions.
• Do not let your financial planner forge your name.
While you might think this could prove convenient, helping you save a lot of time, you are opening up to chances of fraud and even trouble with the law.
• Never let your financial planner use his address on your account statements.
See that it’s your address on the account statements, investment papers, etc. It is you who should receive the periodical statements directly from the bank, insurance company or brokerage firms, not your planner. Always insist on statements made on using proper firm stationery, not just a blank piece of paper.
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