Your parents have worked all their lives to save for retirement, but all of that hard work can be undone by unethical financial advisors. Recent Department of Labor regulations have attempted to protect against conflict of interest and minimize abuse, but it’s important to take note of the risks that remain.
Here are some ways to protect against financial abuse:
- Find respected professionals, ideally those recommended by people you trust, and whose credentials can be checked. Look for members of a professional organization with a code of ethics and standards of practice, which require full disclosure of conflicts of interest.
- Choose specialists with the specific skills you need, such as:
- Attorneys who can draw up estate plans, wills, and trusts.
- Financial planners that operate in your best interest (e.g. fee-based vs. commission-only)
- Daily money managers who pay bills, manage mail, complete forms, and organize financial papers. Look into the American Association of Daily Money Managers, and check out the “10 Questions to Ask” when hiring one.
- Insurance agents working with highly rated reputable insurance companies, which are supervised by state officials.
The key to minimizing or preventing abuse is to be vigilant on an ongoing basis, constantly checking for possible wrongdoing. Familial abuse is harder to manage, but can still be addressed by engaging other trusted family members or professionals. In taking steps towards organizing and keeping watch over your finances, you will be more than capable of avoiding these horrible crimes.
What are you doing to minimize or protect against financial abuse? Share any stories of success or frustration with us!