Posted at: 02/06/2013 2:59 PM
Updated at: 02/06/2013 5:47 PM
When it comes to investing your hard earned dollars, you need to be extra careful about who you trust. Some investors learned that lesson the hard way.
You probably put a lot of trust in your financial planner to do what's best for you, but if you aren't careful about who is handling your money, you could wind up with nothing.
Marian was crushed to learn the man she had trusted for more than 15 years was actually stealing her money.
Marian said, “After all the years of knowing him, of course, I believed what he was saying."
Don Rood, U.S. Postal Inspector, said, "He was a certified financial planner, he has the highest license you can have to sell securities and insurance. "
John Wosotowsky lured clients in by telling them he could get them a 6% return on their money.
Rood said, "They didn't get any rate. They lost everything they invested with him."
Marian said, "I got a call from a MetLife investigator who said John was in trouble, he had done this horrific thing, and I was so trusting I didn't even believe him."
Marian learned very quickly it was true. She had lost her life savings.
In all, 25 victims lost more than $2.9 million dollars.
Rood said, "A man invested half a million dollars, all of the statements were totally fictitious and had been prepared by Mr. Wosotowsky and mailed out to several victims.”
By law, financial planners must register with the securities and exchange commission. However, not all of them have the necessary qualifications. News10NBC checked in with the Better Business Bureau which offers this advice when choosing a financial planner.
First, survey your friends and relatives who have had success with their own financial planners. Check with the SEC to make sure they are registered accordingly. You can also find out through the National Association of Securities Dealers for any disciplinary actions on file.
Once you've selected a prospective planner ask questions. What is their educational and professional background? What are their investment philosophies? Do they provide references? And how do they plan to be compensated through fees, commissions or a combination of both.
Marian said, “I felt stupid at first, I felt bad, sad.”
Rood said, "Most of it went to gambling, alcohol, drug addictions, traveling and living the good life."
A good financial planner should work with you to help you get a clear picture of your financial situation. The BBB has some other useful advice. Beware of planners who offer few or no alternatives in your investment plan and avoid those who use high-pressure tactics. And before making investment choices, get your planner's advice in writing and make sure you understand the risks involved.