Anything in Finance = Fraud. I do not think "trust no one" sounds paranoid and I think this story basically proves it. The guy passed the "school, demeanor, and disciplinary (which I think is background check?). So if all those ideals fail, how can you trust someone else with your money?

I was thinking about going to a professional to get my money under control, but then I realized I could do it myself. Very happy I went with myself other than some person to steal MY money.

I do think "trust no one" is kind of paranoid, but in this day and age, if you are entrusting your money to someone, you better know their life in and out, and you better know that they're not the type to get greedy. All kinds of people can find themselves embezzling funds, but it's the responsibility of the consumer to know the various ways a financial planner can fall off the morality wagon.

@LegoMan322: I fully agree. No one is ever going to look out for your own interests as well as you can.

I've said this before on here, but I'm very dubious about the value of financial planners, in general. In order to find one that is reasonably ethical and has something valuable to contribute to you that is more than worth their fees, you have to know a lot about personal finance already. And if you know a lot about personal finance, why go to a financial planner who in many cases doesn't know much more than you do, won't put in the effort to do much better than you even if they do, and might even completely defraud you? Better to just learn as much as you can about finance yourself and manage your own money while consulting various experts (tax accountants, lawyers, etc) on an incidental basis as needed.

I think that all of this is a sign of the general decline of ethics and competence in American business. The financial services industry (including financial planners, bankers, insurance, etc) is hopelessly corrupt and full of scam artists. The real estate industry is another semi-connected area that rivals them for sheer levels of corruption, incompetence, and greed. In all these areas there is a proliferation of loser amateurs with high school educations who think they deserve to be paid large salaries for doing little better than an amateur.

My wife had money stolen from her account. Her financial advisor had checks sent to his office to cover his fee. We didn't know about it until she got 1099s showing that she withdrew money from her IRA which of course she hadn't. We wrote to the company he was employed by and the SEC and got all the money back and corrected 1099 forms so there was no tax due. He was fired but he's now working somewhere else.

@pecan 3.14159265: I don't agree that "all kinds of people can find themselves embezzling funds". Once they cross that line, which is a choice and not something that people "find themselves" doing, then they are all the same: criminals who deserve to never have a job handling other people's money again. Seriously, embezzlement should get you put on an employment blacklist for life.

Don't do business with family. Family members are just as fallible as anyone else, but sometimes they have this weird perception that because you're family, their mistakes don't carry as much weight, and they'll be forgiven. It can be awkward to pursue legal recourse against family members, and your will may be tested on this one. And you really don't want your great-aunt Lois calling you and asking why you're suing her son, Bobby, because he pilfered $6,000 for a vacation to Aruba.

Please, don't do business with family.

@pecan 3.14159265: Totally agreed on this one, unless you're totally able to detach business from emotional considerations. Even family-run businesses are often problematic in this way, but at least in that case there's often more people involved than just one person and therefore there's a collective interest among the family in having the business succeed.

@johnva: I'm just saying that there's isn't a "type" of criminal that would embezzle funds...you can't see this person across the street and go, "he must be stealing money from grandma." You can be well-educated and be good at your job, but it doesn't mean you won't be a thief.

@pecan 3.14159265: I think are talking 2 ways here...you want to every in and out of their life but "trust no one" is not out of the question?

I feel that if you look into every detail of their life...that in its self is not trusting.

Also why do you need someone else to handle YOUR money? It is not that hard. As a former sales person...do not trust anyone who will make "commission" or any kind of direct money like that.

If you take what they say at face value, you will get a whole lot of sh*t in the face.

@LegoMan322: Some people with a significant amount of finances, stock, investments, etc. need people to handle their money.

@pecan 3.14159265: OK, sure, I don't believe that there is one sort of "profile" for criminals. I was just objecting to your language about "finding themselves" stealing.

@pecan 3.14159265: Why should the amount of money involved change whether someone has need for someone else to handle their money? The principles are essentially the same. I think that argument goes both ways: the person with a large amount has even more to lose from trusting someone else to handle their finances for them, and represents a bigger target for scammers. Just look at how many financial vultures descend on people who win the lottery, for example.

@pecan 3.14159265: I think the word "significant" is key there. If you are a billionaire I could understand a financial guy, but if you are an "everyday Joe/Jane" putting what little money you have in someone else's hands I feel is a HUGE mistake.

I usually ask myself...."what does this person gain?" and if the answer is "my money or life savings", do you want someone else to gain that? I sure as hell do not.

@johnva: Because LegoMan asked, "why do you need someone else to handle YOUR money. It's not that hard." And yet, it can be difficult for people with significant assets, and it can also be difficult for people with simple assets. The point is, it's not about how much money you owe, but plenty of people on Consumerist jump all over people who choose to use a financial planner, and tell them they're stupid when they can just use some software. That's not the point - it's that people choose to use financial planners. I'm just tired of the "these people are stupid, why can't they just do it themselves" argument. Some people want a financial planner, regardless of how much money they have.

Get educated. Open a big name discount brokerage account. Handle your own money. Don't believe the talking heads on TV or in the print media. Financial planning is easy. It is not hard. Handing over your money to someone else is a giant leap in faith that I will not and need not take.

@pecan 3.14159265: HEAR HEAR!

Do you do your own plumbing, electrical work, carpentry? No you call those guys or a contractor.

There is reasons for people going into professions. If you're savvy at financial planing, then great, but as we've seen in this recent debacle, most people suck at it.

Pecan pie is very yummy btw.

@pecan 3.14159265: Yes but isnt that 1% of the population? We are constantly talking about how the economy is shit and everyone is poor. Why are we now talking like everyone has a helicopter, or a swiss bank account with millions of dollars.

Rich people with the above mentioned need "financial planning" or a kick ass accountant. Normal poor people such as myself can/should be able to handle their accounts.

Also beware of anyone who moves and shakes with politians, churches, or charities. We have had several regional (TN) high profile cases where the fraudulent investment person wanted to rub shoulders and be called on by name by those organizations.

In one case a supposed 401k manager was moving money like checkers among personal, business, and investment accounts- Amsouth (later Regions Bank) got busted for that one too because they failed " to know their customer " and charged crazy fees while they let the manager move money from trust accounts to personal accounts.

The other case involved a guy who scammed his church friends and others then later wacked himself when it all fell apart. He left a trail of donations which even ensnared the Country Music Museum and Hall of Fame because the instrument which he bought and donated was bought with scammed funds. The Museum had to scramble to pay off the instrument as it could have been seized back by the gov't to pay back the scammed funds.

You want someone who is dull and has no life, no expensive hobbies, and no craziness associated with his/her life so you can be sure he/she won't siphon off money. And you want to make sure that person is aware of Nigerian 419 scams too...

@pecan 3.14159265: I still don't agree that it's really any more necessary to do more complex financial planning just because you have more money (up to a point). I will make an exception for people who are so rich that they need estate planning to avoid huge estate taxes, but that's not most working people. Most people would be fine with just having a few competent specialized people like a lawyer, an accountant, and an insurance agent, combined with some knowledge. I'm not against consulting experts who specialty knowledge, but I don't agree with the idea of financial planners who have any level of direct control over managing your money. I'm not even necessarily against consulting a financial planner for advice, but I would never, ever give any of them any sort of direct control over any of my accounts or investments.

I'm not saying that it's "stupid" to want to use a financial planner, but I do think it's not a wise choice if you're using it as a way to avoid having to learn about personal finance. If you're using it as a crutch like that, you're bound to get screwed over by the numerous jackals there are out there.

@econobiker: Always watch your wallet when someone tells you they are a "Christian". The good ones won't bring that up.

@Skankingmike: I think what the recent debacle has taught us is NOT that most people suck at financial planning, but that most "professionals" involved in finance are scammers and fools. We would have very few of the problems we currently have if all the "financial professionals" in real estate, insurance, banking, and investment had either grown or brain or some ethics.

@johnva: I would disagree with that only because once you hit a certain "bracket" most everything you can purchase will be some how...some way tax deductible. So right there you need an accountant. Then once the accountant uses their magic, there is all this extra money. That is where a financial planner takes over.

Also what lazy ass CEO or some other rich dude is going to look into the vastiness of their books? Rockafellers do not do it, Kennedy's, Bill Gates, etc.

@LegoMan322: Having lots of tax deductions generally doesn't have as much to do with income level so much as it has to do with running a business, having complex investments, etc.

@johnva: Yes but that mortgage broker who took advantage of the system did so to somebody who knew nothing of his/her own finances . So i still blame the guy that signed the contract.

In the end somebody who knows their limits will not be duped into a ARM mortgage (not that all ARM's are bad just most people should not go for them).

@johnva: The only point I want to make is wealthy people who need a financial planner do not have the time nor the inclination to take care of their own books. I would be very surprised if Bill Gates left Sunday open to balance his checking account.

@johnva: If I may Johnva....Always watch your wallet with everyone except for you, but especially with politians, churches, and charities.

My 3 favorite things.

I think this all just boils down to people are either bad or in the process of becoming bad. We all have that little voice in our heads that says "do it, nobody will know." I choose not to listen to mine... most times, hah, but some people just go for it.

Take 5 sample treats from a store = jerk.

Rob a convienent store (for food and mabe 300 dollars to survive) with a fake gun or holding your pocket out like a gun, get minimum 15 years.

Being a greedy well off bastard and Take millions from investors, destroying hundreds of lives, livelihoods, generations to come = fired and fined.

How does that add up again? Someone please explain this to me?

@Skankingmike: I blame the guy who signed the contract too, but I blame the corrupt system MUCH more. I would put the blame 95% on the "professionals", 5% on the individuals. Someone should have intervened and realized that making those ARM loans to people unsuited to them was a bad idea for EVERYONE involved. Where were the real estate lawyers, appraisers, real estate agents, mortgage brokers, bankers, etc? All of them should have stopped these things from happening, and didn't, because they profited more in the short term from letting it happen. Why would adding another so-called "professional" to the mix help when the person has already been scammed by a dozen or more other "professionals", some of whom were also ostensibly hired by them to represent them? The fact is, managing money attracts corrupt and unethical assholes, because corrupt and unethical assholes are greedy. Your only real defense is information, because it's a lot harder for anyone to scam you if you understand what they're doing.

@LegoMan322: Bill Gates is not typical. I'm speaking in general terms about what would benefit the average consumer.

Financial planners are weasels. Put your money in the bank or an index fund. Don't pay someone to place bets for you unless you're at OTB.

@LegoMan322: What's the line to the point where it's too much? There certainly isn't talk about how everyone is poor. There are people who do have money, and do want help managing it. My parents are normal people, but they have diversified accounts, and have a really good accountant to help them keep track of all their investments. It saves them a little time and hassle.

@ilovemom: Not sure a bank is the best way to go but point is understood.

@johnva: The only thing we disagree on is that "average customer" needs financial planning. I believe they are better off by themselves and you feel they need financial planning.

@ilovemom: Completely agree.
Stock picking, market timing, and track record investing are just means to gamble with your money (or to pay someone to do it for you). Index funds are the most efficient way to invest.

A personal finance columnist hands his money over to a financial planner? Why in the world would I read anything this columnist writes? This guys, obviously, knows nothing about handling his OWN money.

@NeonNoodle: It's simple: if you're a criminal who steals enough, you can use your criminal gains to corrupt the people who make and enforce the rules, and get them changed so that what you did is "okay". Corruption kills societies, and it's killing ours. It's why we need progressive income tax laws, estate taxes, and such that slow the concentration of wealth in a few hands.

@LegoMan322: Maybe you misread me: I also feel the average person is better off by themselves. I only think professionals should be brought in in exceptionally complex situations.

@johnva: The guy who signed the contact is defiantly wrong. They always are. It is corrupt system, that is why you should stay out of it. You can't win! ::said like Adrian from Rocky:: : )

Minor typo: NAPFA = National Association of Personal Financial Advisors (not planners)

Anyone ever notice how the GOOD finance professionals never seem to make the news? Blame it on Jerry Springer for making the absurd and evil seem interesting.

@AllanG54:

So how would someone know about this instance? Would it be on FINRA Broker Check? See [www.finra.org]

@LegoMan322: pretty ignorant comment. way to paint every financial planner due to the tiny minority that have committed fraud. At least in the brokerage business, once you're committed of fraud(for anything, not just related to business) you're disbarred for life from handling client's money. Very few industries hold people to similar standards. That being said, you should never sign over discretionary authority to write checks and make trades.

@NeonNoodle: It is that violence thing that freaks people out. A guy with a gun who knocks over a quick mart for drug money will get more jail then the guy who loots his customers' accounts to buy Japanese artwork and real estate.

Remember the pen always steals more money than the bullet...

@tinyhands: NAPFA = their main goal is probably an organization to lobby for or against laws that benefit or trouble Personal Finanacial Planner business along with trading tips and providing advertising for Personal Financial Planners.

There are so many different Associations that do nothing but this for various business groups...

@kwsventures: He did not hand his money over to a financial planner. He wrote, "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." So Ron Lieber paid Weitzman for advice, but did not allow Weitzman to perform transactions on his holdings.

@johnva: The amount of money has no bearing. It's the way in which to "funnel" that money so it will always make you money and avoid all or most taxes.

You are correct that balancing $100 is no different than $1,000,000, but the million dollars has much more significant play than the 100. Much more things to worry about.

I bought a book about personal finance, but it covers mostly stocks and funds and all kinds of stuff I don't have (I got it at one of those bookstore closeouts and it was only $1). I'm saving it for when I'm independently wealthy.

The level of ignorance in these comments is astounding.

@cmdrsass: Elaborate.

Too bad it wasn't Suze Orman.