NAPFA and the Fee-Only advisor community are hopeful the new administration, the SEC and other regulatory bodies will enact thoughtful regulations to protect consumers
Concord, MA (PRWEB) March 26, 2009
Bernard Madoff's alleged Ponzi Scheme stands as an example of how the financial services industry has failed to protect the best interests of consumers. It highlights the increased need for consumers to proceed cautiously when working with an advisor and the importance of asking pointed questions before hiring a professional.
As the post-Madoff era begins and the federal government and industry regulators decide the best course of action to protect consumers, people need to ask the right questions of an existing or potential advisor.
Tom McFarland of The Darrow Company, Inc., a Certified Financial Planner™ practitioner and a member of the National Association of Personal Financial Advisors (NAPFA), the country's leading association of Fee-Only financial advisors, encourages consumers to take the time to get to know an advisor and gauge his or her commitment to placing clients' interests first.
Find out how the advisor and his or her firm are compensated. Fee-Only compensation has the fewest conflicts of interest, but there are other acceptable methods as long as full disclosure takes place up front. It's important to know if an advisor will make additional money if clients follow certain recommendations.
Consumers should always know where their money and securities are actually held. Most reputable advisors will use an unaffiliated custodian for the safe keeping of client assets. This simple check and balance could have saved the Madoff investors millions by bringing the problem to the forefront earlier.
Legally, all clients are entitled to a copy of the firm's Form ADV Part II or brochure. It's a compliance document, that can be pretty dry, but it holds a lot of important information and ultimately shows that the firm is registered with the SEC or state.
"NAPFA and the Fee-Only advisor community are hopeful the new administration, the SEC and other regulatory bodies will enact thoughtful regulations to protect consumers," said Tom McFarland, President of The Darrow Company.
Consumers can access a Financial Advisor Checklist and Financial Advisor Diagnostic on the NAPFA website by visiting http://www.NAPFA.org and clicking on the Tips and Tools button in the Consumer Information section. The Diagnostic tool includes an answer key to help consumers understand NAPFA's recommendations for the most appropriate answers to the questions.
Consumers interested in discussing these important questions with Tom McFarland may contact him at The Darrow Company at 978-369-5144.
About The Darrow Company, Inc.: The Darrow Company is a fee-only independent Registered Investment Advisor firm providing comprehensive wealth management services to clients since 1987. The firm maintains offices in Massachusetts and California and works with a diverse client base of individuals and families to help them manage their investments and work towards their financial goals.
For more information on The Darrow Company, Inc, please visit http://www.darrowwealthmanagement.com.
The Darrow Company, Inc.. ("Darrow") is an SEC registered investment adviser with its principal place of business in the State of Massachusetts. The Money Conferences are not affiliated with or sponsored by Darrow. For information pertaining to the registration status of Darrow, please contact Darrow or refer to the Investment Adviser Public Disclosure web site (http://www.adviserinfo.sec.gov). For additional information about Darrow, including fees and services, send for our disclosure statement as set forth on Form ADV from Darrow using the contact information herein. Please read the disclosure statement carefully before you invest or send money.