The Bernie Madoff/Bad Advisor Risk

Jeff Camarda (), Steven James Lee () and Jerusha Lee ()
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Jeff Camarda: Family Wealth Education Institute
Steven James Lee: California State Polytechnic University
Jerusha Lee: Claremont Graduate University

A chapter in The Financial Storm Warning for Investors, 2021, pp 57-65 from Springer

Abstract: Abstract This chapter addresses the danger of inadvertantly selecting bad financial advisors. The current regulatory landscape, perhaps due to the impressive marketing and lobbying budgets of large financial service firms, disfavors the consumer. Fraud and other forms of misconduct occur more often in the industry than they should, and when they do, they are not always clearly visible to individuals seeking financial advice. Education requirements for advisors are nearly absent, and there is no uniform profession. Many if not most advisors are free to put thier own interest ahead of cleints’. The fact that fraud is difficult to define, combined with the fact that most people lack the resources to adequately investigate it, means that you must choose your trusted advisor very carefully. There’s more to an advisor than owing you a fiduciary duty. Regardless of how rich you are, in the wealth-managment business, you cannot afford to hire bad actors.

Keywords: Counterparty risk; Bernard Madoff; Regulation; Fraud; Misconduct (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-77271-0_6

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DOI: 10.1007/978-3-030-77271-0_6

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