Personal Finance Columnist's Financial Advisor Accused Of Fraud

Last week, New York Times personal finance columnist Ron Lieber discovered that his family’s financial planner was being investigated for fraud, because millions of dollars had been transferred out of clients’ accounts without authorization. What’s funny is Lieber found the financial planner while writing a column on how to comparison shop for one.

“We liked Mr. Weitzman’s advice and demeanor,” he writes. “His disciplinary record was clean and he had gone to good schools (Cornell undergraduate, Columbia M.B.A.).” He was also a member of the National Association of Personal Financial Planners, an esteemed group that is promoted as a sure sign of ethics.

So what can you do to protect yourself from something like this, if you can’t rely on your own judgment and the Napfa affiliation? “Trust no one” sounds a little paranoid, but since it’s your life savings we’re talking about, well, trust no one. Lieber notes that if you want to protect your money, the best thing you can do is take an active role in managing it, and that means no power of attorney docs or giving your advisor permission to write checks on your behalf:

It’s hard to thwart someone intent on committing a crime. But you can at least put your advisers on notice by not letting them trade on your behalf at all. That’s what we did with Mr. Weitzman, simply because we don’t think it is a good idea to give anyone that authority.

[…]

Trust but verify. Open your mail. Confirm the accuracy of your trades and fund transfers. Read your account statements. Every month. Every number. Every single word.

“How a Personal Finance Columnist Got Caught Up in Fraud” [New York Times]
(Photo: Jim, the Photographer)