Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



How to Beat a Retirement Scam

Another day, another scam.

Recently, the SEC, in concert with the Financial Industry Regulatory Authority (FINRA) and state regulators, said that it found widespread evidence of investing schemes that promise riches to seniors but deliver little, if anything, in return. Once again, there's no such thing as a free lunch.

How about some free advice instead?
Personally, I think there ought to be a lovely unfurnished concrete suite at the state pen reserved for every sicko who preys on the elderly. But we can't expect justice for all. Our best defense is to never get involved with crooks in the first place.

How to do that? I asked Rule Your Retirement editor Robert Brokamp. Here are his three tips for finding a worthwhile money manager:

1. Call the cops. Start with a trip to Broker Check. There, you can usually find a copy of Form ADV, which brokers and advisors that manage $25 million or more use to register with the SEC. (State securities regulators may have similar forms.) And don't forget insurance. Robert warns, "Since most of these folks also sell annuities, which are insurance products regulated by the states, check with the state insurance commissioner to see if there have been complaints."

2. Ask for ID. When money managers claim to have some designation (e.g., CFP) or belong to a professional association (e.g., NAPFA), check with those organizations to see if they really are members and if there have been any complaints. "Many designations are meaningless, created by folks looking to charge advisors thousands of dollars for the right to put a few initials after their names; there is little education or certification involved," says Robert. "The gold standards are CFP (for financial planners) and CFA (for investment analysts). They are the real deal."

3. Be picky. Interview at least three professionals before you choose. Doing so will help you understand the range of styles and services available, and increase the chances you'll find someone you're comfortable with, both in terms of personal interaction and investment strategy. "You're hiring someone, so approach the process as if you were a business owner looking to hire a CFO. Dig deep, review credentials, and get references from people you trust," advises Robert.

Take the road most traveled
And then, before you buy, ask yourself one last question: Couldn't you do this on your own? I think you can.

Take index funds, for example. They cost virtually nothing to own, take minutes of maintenance per year, and, most of the time, provide exposure to a wide range of excellent stocks. Here's a sampling of those owned by the Vanguard 500 Index (VFINX):


Portion of Portfolio

ExxonMobil (NYSE:XOM)


General Electric (NYSE:GE)




Citigroup (NYSE:C)


Microsoft (NASDAQ:MSFT)


Source: Morningstar.

And that's just one strategy. There are dozens more that you needn't pay thousands to implement, some of which you'll find at our 100% free Retirement Center.

Scams are like bugs. They're worth swatting. For now, the Feds are onto the free-lunch bunch. But there will be other scammers sure to come calling. When they do, use Robert's tests. Those who complain aren't worth your time. Those who don't may be worth a look. It's really that simple.

For more advanced help, consider Rule Your Retirement. Robert is offering a 30-day free pass to the service, right now, to anyone who asks. Take him up on it, and you'll find out why he thinks that, even in retirement, you should have the majority of your net worth invested in stocks and stock funds.

Fool contributor Tim Beyers probably won't retire. He'll hunt and peck his way to the grave. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Microsoft is an Inside Value pick. The Motley Fool's disclosure policy took Adrian Peterson of the Minnesota Vikings in the fourth round of its fantasy league draft. Eat it, Atlanta.

Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 536737, ~/Articles/ArticleHandler.aspx, 10/27/2016 1:36:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,208.98 9.65 0.05%
S&P 500 2,138.56 -0.87 -0.04%
NASD 5,231.61 -18.66 -0.36%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 1:20 PM
C $50.45 Up +0.44 +0.87%
Citigroup CAPS Rating: ***
GE $28.69 Down -0.19 -0.64%
General Electric CAPS Rating: ****
MSFT $60.55 Down -0.08 -0.13%
Microsoft CAPS Rating: ****
T $36.80 Up +0.37 +1.02%
AT and T CAPS Rating: ****
XOM $87.50 Up +0.41 +0.47%
ExxonMobil CAPS Rating: ****