Looking for a Financial Planner? The Go-To Website Often Omits Red Flags

[question everything]

Many people seeking a financial adviser begin their search at LetsMakeAPlan.org, a directory operated by the Certified Financial Planner Board of Standards Inc.

The Board, which controls the CFP label coveted by financial planners, boasts of its high standards and has touted its directory of professionals as a place where people can find a screened, skilled and trustworthy financial planner.

What they won’t find there is any indication that thousands of the planners bearing the board’s seal of approval have had customer complaints or faced criminal or regulatory problems—often directly related to their work with clients. More than 60 have filed for bankruptcy within the past decade although the website says they haven’t disclosed such an event in the last 10 years.

(snip)

The Journal compared data on the LetsMakeAPlan.org site against records kept by Finra, an industry-funded watchdog with legal authority to regulate brokers. Among the planners the Journal’s analysis flagged, more than 5,000 have faced formal complaints from their clients over investment recommendations or sales practices, and hundreds have been disciplined by financial regulators or left brokerage firms amid allegations of misconduct. At least 140 faced or currently face felony charges, including one who pleaded no contest to a charge of possessing child pornography.

(snip)

Every two years, all CFPs must update the Board on their financial and regulatory history. Any who are convicted on a criminal charge or have a professional license suspended or revoked must notify the board within 30 days. It “relies heavily on self-disclosure, complaints from either clients or other CFP professionals, and news scans,” the Board said. In response to the Journal’s findings, the group said, it will from now on look at Finra and SEC records each time a CFP renews certification.

More..

https://www.wsj.com/articles/looking-for-a-financial-planner-the-go-to-website-often-omits-red-flags-11564428708 (paid subscription)

[customerserviceguy]

1. Most financial planners

are no better than Leonardo diCaprio's character in "The Wolf of Wall Street". Churn 'em and burn 'em.

[A HERETIC I AM]

2. That's one reason it's important to be aware of the "U-4" and to use the Brokercheck system

https://brokercheck.finra.org/

This gives at least some further information on a Broker or other Registered Representative, particularly if he has had complaints filed against him by clients.

[JudyM]

3. I'm shopping for one now for my mother. Not an easy process, no clear path that I've found.