lous advisers have been known to remove those pages before hand-
ing an ADV to a prospective client, you should independently obtain
your own complete copy.) It’s a good idea to cross-check a financial
planner’s record at http://www.cfp-board.org, since some planners who
have been disciplined outside their home state can fall through the reg-
ulatory cracks. For more tips on due diligence, see the sidebar below.
Commentary on Chapter 10 275WORDS OF WARNING
The need for due diligence doesn’t stop once you hire an
adviser. Melanie Senter Lubin, securities commissioner for the
State of Maryland, suggests being on guard for words and
phrases that can spell trouble. If your adviser keeps saying
them—or twisting your arm to do anything that makes you
uncomfortable—“then get in touch with the authorities very
quickly,” warns Lubin. Here’s the kind of lingo that should set off
warning bells:
“offshore”
“the opportunity of a
lifetime”
“prime bank”
“This baby’s gonna
move.”
“guaranteed”
“You need to hurry.”
“It’s a sure thing.”
“our proprietary
computer model”
“The smart money is
buying it.”
“options strategy”
“It’s a no-brainer.”
“You can’t afford not to
own it.”
“We can beat the
market.”
“You’ll be sorry if you
don’t.. .”“exclusive”
“You should focus on
performance, not
fees.”
“Don’t you want to be
rich?”
“can’t lose”
“The upside is huge.”
“There’s no downside.”
“I’m putting my mother
in it.”
“Trust me.”
“commodities trading”
“monthly returns”
“active asset-allocation
strategy”
“We can cap your
downside.”
“No one else knows how
to do this.”