How to Avoid Incompetent and Unethical Investment Professionals

Life altering investment mistakes often result from trusting the wrong investment professional. Most catastrophic investment losses in an investors’ portfolio can be traced back to an investment firm or investment professional that is either incompetent or unethical.

As a result, we strongly recommend that investors do their due diligence on their investment professional (and the affiliated investment firm) before they even consider how to invest their money.

If investors can avoid bad advisors and bad firms, they can substantially reduce their chance of the types of investments that are so bad that they destroy the investors financial future. This article is designed to help you avoid those professionals in the investment world that can and likely will devastate your financial future.

If this article sounds overly dramatic, it is because our firm gets calls almost daily from retirees around the country who discover, after it is too late, that they bought a life-changing, high commission product that didn’t perform as they were led to believe, they no longer want, and they can’t sell because there is no buyer’s market. Or, worse yet, invested in something that is now starting to look like a scam or a Ponzi scheme. And, sad to say, we are now also starting to see the downside of investing in technology driven investments such as Bitcoin.

Although investors have plenty of evidence over the last ten years that fraud, incompetence, and conflicts of interest are rampant in Wall Street investment firms, hedge funds, and elsewhere in the investment world, successful sales pitches for bad products and bad strategies seem to be even worse than before the financial crisis. Regulators have proven they are not able to protect investors from this ongoing wrongdoing as evidenced by the inability to stop this type of behavior or even enact appropriate standards for investment world they purportedly regulate. As a result, it’s up to you and me to help you avoid the crooks and incompetents in the investment world and prosecute them in the event they succeed in taking advantage of investors.

So how do you go about avoiding the wrong investment professional and their firms? Just a few of the tips we recommend are set out below.

First, you need to understand that it is terribly easy to become an insurance salesman or financial adviser in comparison to the training, experience, education or testing required of doctors, certified public accountants or attorneys. Unless your financial adviser is a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA), or the equivalent thereof, it is unlikely he or she has the type of education and testing required of other professionals on whom you rely. As a result of this, it is crucial you take the time to find out whether the investment professional’s licenses and designations are significant or the type that a used car salesperson can get after taking a crash course on how to get a basic insurance or securities license.

Second, as a corollary to the tip in the prior paragraph, don’t base your decision of what investment professional to hire on any of the following factors: Personality; golf handicap; friend recommendation; or free steak dinner seminar. Hire them based on their credentials, experience, regulatory history, and other factors establishing their ethics and knowledge relating to investments.

Third, investigate and verify the following: That the investment professional does not have multiple customer complaints in the last 10 years (or a history of other problems such as criminal, bankruptcy, or regulatory issues); and that the investment professional can sell you products and strategies other than products and strategies wherein the investment professional will receive significantly bigger commissions than other options in the marketplace (e.g. avoid investment professionals who only sell annuities).

Please review our website and posts for additional information and ideas for avoiding incompetent and unethical investment professionals. By focusing on the right criteria for selecting a qualified investment professional, you will significantly reduce the chances that your net worth takes a significant hit from bad investment products in your portfolio

Vernon Litigation Group is a team of financial litigators that represent clients in courtroom litigation, arbitration, and mediation throughout the United States. Our lawyers have collectively represented thousands of investors in FINRA and other securities arbitration and litigation claims nationwide and recovered many millions of dollars from financial institutions, both large and small. For more information, visit our website at or contact Vernon Litigation Group by phone at (239) 319-4434 or by e-mail at

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