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.