Transparency is Critical for Investors

The article below talks about an investment advisor who defrauded his clients of almost $2,000,000.–louis-area-financial-advisor-defrauds-clients-of–1-8-million-14531.html?section=43

Investment Advisors can print reports all day long showing you how well your portfolio is doing.  How do you know if there is any validity to those reports?  You don’t unless that advisor uses an outside custodian such as Schwab, Fidelity, TD Ameritrade, etc. to hold your stocks, bonds, mutual funds or ETF’s.  A custodial account is one that you must open.  There are forms to sign just like opening a bank account.  With custodians such as these, investors receive monthly statements – just like a bank statement – showing each holding in their portfolio (account).

In order to ensure that information provided by an investment advisor is valid, investors should compare the reports provided by that advisor with their monthly (outside custodial) statements.  The advisor reports and monthly statements should match to the penny.  Only then can investors be sure that they are not being robbed of their hard-earned money.



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