Consumer Alert: How to avoid financial advisor scams and protect your hard-earned money

Consumer Alert: Would you trust robo-advisors?

The News10NBC Team details breaking News, Traffic and Weather.

ROCHESTER, N.Y. — When it comes to your hard-earned cash, who can you trust? That’s the question you have to ask yourself when hiring a financial advisor.

While most financial planners are honest and ethical, News10NBC’s Deanna Dewberry hears about scams all the time.

One of the scams Dewberry has seen over and over again is when someone calls themselves a financial consultant, but they’re just selling a product. A consultant doesn’t have the licensing or qualifications to help you manage your money or give you financial advice.

So Dewberry asked personal finance expert Jarrett Felton, founder/managing partner of invessent what to look for in a financial advisor. “First and foremost you want to make sure that they are a fiduciary,” Felton said. “Meaning that they have to put their client’s needs ahead of their own at all times and is always acting in the client’s best interest. If they’re a fiduciary, I’m not saying there aren’t bad people out there who don’t take it seriously, but they are held to a higher standard.”

Dewberry asked, “So being a fiduciary, does that mean that you have further training, another license, what does that mean?”

“Sure, so there is a license requirement. And it’s really more so about accountability,” Felton responded. “As a fiduciary myself, if I’m sitting down and going over people’s finances, if I do something wrong or unscrupulous or something like that, I’m held to a higher letter of the law.”

There are several sites you can check for licensing. The New York Department of Financial Services has a website where you can look up your advisor by name. You can also check the North American Securities Administration for your advisor’s CRD license.

Lastly, the certification process to become a Certified Financial Planner is rigorous and requires continuing education. The CFP Board provides a website to look up your advisor as well.

Investment advisors must register with the Securities and Exchange Commission. You can also find out if the advisor has been named in any court actions or administrative proceedings.