WAUSAU, WI (WSAU) — Financial Advisor Meryl Kelch of Kelch and Associates says there’s no reason to be skeptical of the system after the sentencing of a former Wausau-based advisor last week.
“The industry that we’re in, the securities industry, is probably one of the biggest faith and trust organizations besides maybe your bank,” said Kelch. “But on the other side of that, the safeguards that are in place are astronomical. We are watched in our industry from every corner, and rightfully so.”
RELATED: Former Wausau Financial Advisor Sentenced in Multi-Million Dollar Ponzi Scheme
Given those safeguards, Kelch says incidents such as this are rare. But they do serve as good reminders to have open communication with your financial planner so you understand everything that’s going on with your account. One telltale sign that something is off is how often fees are being charged to your account. “If you have a managed account where you are agreeing to pay a fee, generally around 1%, the fees are coming out [quarterly.] If your management fees are coming out once every other month, once every two weeks, three weeks, or multiple times in a quarter there is a problem. That’s just not how it works.”
Other signs that something isn’t right could include an advisor requesting checks made out directly to them, a tactic famously used by Bernie Madoff. That allows the advisor to deposit the checks into their personal accounts. He also says you should be suspicious of anyone who won’t let you go to another financial professional for a second opinion because that could be a sign that something is hiding in your statements.
“I always recommend people seek a second opinion. Talk to another professional, and see if they have an opinion or a thought about this. There’s nothing wrong with doing that. I know our clients do that, and we recommend it,” added Kelch. “[If the advisor is saying] ‘No you don’t need to see that,’ or something of that nature- I always think there’s a problem.”
Kelch said the news of someone stealing money from their clients was “atrocious” to him.
Anthony B. Liddle, the former owner of Prosper Wealth Management in Wausau, was found guilty of stealing nearly $2 million from his clients. He will serve eight years in federal prison as part of that sentence.
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