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The Financial Advisor

Yaacov Apelbaum-The Financial Advisor

Your Trusted Advisor

You can’t miss him. He’s the guy with the freshly pressed $500 suit,  designer silk tie, and imported Italian shoes.  His stylish  attire is elegantly complemented by an expensive fountain pen, a standard issue Rolex, the latest  cell phone, and a brand new luxury car. His physiognomy is unmistakable, styled hair, white teeth, and a nice tan; a modern day Cary Grant.  

He’s a natural, standing out at every social gathering—in the fitness club, on the golf course, at church and synagogue.  He is jovial and funny, the toast of the party, a real screamer.  Always the first to introduce himself, reaching across the room with a friendly and firm handshake.

He loves sports and works out regularly. Which one is his favorite? Well, he loves them all.  If you let him, he’ll talk to you for hours about the Super Bowel, the NBA, or the US Open

If sports are not your thing, that’s ok, he’ll talk politics.  But don’t get him started! He has an opinion on all matters domestic and foreign, and he’s not afraid to share them with you.  He has strong convictions about capitalism, socialism, the government , the environment…you name it.

After just 10 minutes talking with him, you think “Wow, is this guy connected to the hilt!”  He just got back from Washington D.C (important meetings with policy makers and various other movers and shakers). And then, there is his story about the White House—and check this out: a wallet sized group photo with the local congressman/senator/governor. And did I mention that he’s on texting terms with several high profile celebrities?

He’s not a loner; he frequently travels with the wolf pack. The lovely spouse is always nearby, ready to lend a hand.  She will strategically join the conversation and make a joke or a teasing observation on his account (“Oh, my husband! He is such a Neanderthal. Ha, ha, ha!”),  while your own wife whispers in your ear to check out his adorable son: “He’s only 7! Doesn’t he look mature in his tailored suit!”  The kid, as if suddenly activated by some mysterious homing device, makes a B-line towards you for a handshake. “That’s my dad. He’s a financial advisor!” he says proudly.

By the time you’re done shaking hands with the kid, you realize that he’s dad has moved on.  You watch him mingling with other guests working the room like a cowboy in a rodeo, quickly branding the fattened calves for follow up. Than he’s back, telling you a joke (about a CEO who signs a contract with the devil). Next comes the debriefing.  What do you do? Who do you work for? Where is your office? Before you can say “Pocahontas”, he’s punching your e-mail and cell number into his Smartphone

A few days later, as you are getting ready to grab a bite to eat, your cell phone rings. “Hey, how’s it going?” says the friendly voice “Who is this?” you answer confused. “It’s the CEO and the devil guy from last week,” he continues without skipping a beat. “Hey, I happened to be in your neighborhood and I’ve got something for you. Do you wanna do lunch? It’s on me.”  “Sure,” you reply, wondering what he can possibly have for you.

During lunch, he goes over more of the same routine. You discover that he either knows some C Executives in your company or knows someone else who does and he hints that he can pull some strings for you. After lunch as you are preparing to leave, he springs a few expensive tickets for some sporting event and tells you that he and his significant other would love to have you and your significant other over in their private booth to watch the game.  “Come on, its going to be fun!” A few days later when you come home from work, you discover a few boxes of toys and a bunch of CDs and DVDs on your dining room table.  “What’s this, Honey?” you inquire.  “Mr. CEO/devil’s wife just dropped them off. She said that their kids just love them and she thought ours would too!”

This goes on for several months, with lunches, family get togethers,  tickets to see a Broadway show and offers to use his timeshare in Disneyland for free.  You eventually let down you guard; clearly these are such nice people. 

Then one lunch, your newfound buddy, with an intense look on his face, tells you about this amazing 3-month, double digit return investment opportunity. (But you have to act immediately!) “How much are we looking at?” you inquire. “Oh, not much,”  he says, “just 100K.”  You politely decline, telling him that you don’t have that kind of money to invest. He says, “can you borrow it from someone?” Sensing a high pressure sales tactic, you say that you don’t feel comfortable borrowing money from people.  Your dining companion loosens up and assumes his collegial persona again and says  “Hey, that’s not a problem,  I’ll keep my eyes open for other opportunities for you, but I don’t know if they’ll be as good as this one.” 

Then the conversation turns to your company and he starts debriefing you about acquisition plans, mergers, strategy, etc.  His questions seem strangely reminiscent. Oh yeah, you just recently went over them in the corporate anti-trust and insider information certification course.  Now you realize that he’s actually fishing for insider information. 

Yaacov Apelbaum-The Money ClipIn a moment of complete mental lucidity, you suddenly get it. This guy is a professional shyster and he’s been playing you like a violin.  Now would probably be a good time to end lunch and this relationship.  But its not as easy as that.  By now, he has woven himself into your social fabric. Severing the relationship now would cause you and your family mental anguish and would probably require some form of unfortunate confrontation. And what about mutual friends; what do you say to them?

And then there is the doubt issue. Even though now you know he’s dishonest and deceitful, shouldn’t you give him a break? After all, he’s just a another guy with a family and a mortgage trying to make a living, isn’t he?  So, what do you do?

The moral of the story is that this is all a scam.  Don’t let your emotions get the better part of you.  These individuals (and their accomplices) are cold blooded opportunists. They could care less about you, your family, or your financial well being.  Their interest in you is purely financial and short term.  As far as what you perceived to be generosity (the free tickets, lunch, gifts, etc.), they’re just a device to make you feel indebted and emotionally dependent. 

Unfortunately, as many have discovered, few of us are immune from this type of relationship and manipulation.  If you think that being scammed financially only applies to the ship of fools,  check out the Who’s Who on Bernie’s list.

The majority of independent financial advisors\planners operate as one man shows and are not dissimilar to the elixir and snake oil salesmen of the Old West.   To compensate for the lack of substance (i.e. breadth and depth of financial knowledge and operational know how), they rent an office at a respectable address, contract with financial service processor like Investors Capital, and purchase an off-the-shelf website that comes pre-loaded with content and functionality like whitepapers, newsletters, and financial calculators. The rest, is pure social engineering.

Despite the aura of legitimacy the financial advisor\planners industry is trying to assume (through certification and NASD regulation), the fact is that it is riddled with dishonest, unscrupulous confidence artists.  If you need financial or investment advice, go with a large non-contractor or commission based company like Fidelity. They won’t be able to guarantee double digit returns, but they won’t lose your investment overnight either. If you are new to investing, do yourself a big favor and carefully read the information on the FINRA site.  You can also use some of their tools to check out your prospective broker buddy.

Good financial advice is hard to come by. Since most of us are not savvy enough to distinguish between the legitimate advisors and the Madoff  wannabes, you should stay away from all independent financial advisors\planners, regardless of how smartly they dress or successful they appear.   This especially applies to the ones you know through your social circles.

If you do happen to use an independent financial advisor\planner, you may want to scrub him against the following list of the 7 deadly sins of financial conduct.  If he fits one or more of these descriptions, it’s probably time for you (and your investments) to move on.

  1. Promising you any return on your investment (especially ones in the double digit range)
  2. Telling you about sudden investment opportunities that require prompt action
  3. Soliciting you for insider information and references for other potential investors
  4. Paying you in cash or using proxy accounts (like personal checks from a spouse)
  5. Exhibiting dishonesty of any type (i.e. asking you to attend financial sales meetings masked as social events or having any previous SEC or NASD history of complaints
  6. Showing willingness to spend money on you for no apparent reason (including free lunches, gifts for the kids, etc.)
  7. Having a history of contentious job loss with larger financial institutions and lawsuits or litigation involving trading irregularities

Caveat Emptor 

© Copyright 2009 Yaacov Apelbaum All Rights Reserved.

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  1. CowPayday
    October 5, 2009 at 5:15 am

    I love the artwork on your postings; it’s funny and poignant.

  2. October 14, 2009 at 2:13 pm

    Another great post, Jacob.

    • apelbaum
      October 14, 2009 at 3:56 pm

      Hi Tony, thnaks for the feedback :-)

  3. October 21, 2009 at 7:52 pm

    Sarcastic and funny, great post! I’m an instant fan…

  1. October 2, 2009 at 11:07 pm

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