How to spot a fake financial adviser

News that a father and son posing as financial advisers in Worthing have received a six week suspended sentence should act as a reminder to investors that some simple steps must always be followed.

Spotting a fake financial adviser is relatively simple.

The first step you should take before working with any financial adviser is to check the FSA Register.

This online register lists every authorised and regulated firm, as well as every individual approved person. Check that the business is authorised and that the individual adviser appears on this register with a CF30 Customer controlled function.

When using the FSA Register, make sure you select the correct firm name and address; occasionally fraudsters will ‘clone’ the details of existing authorised firms to give the impression that they appear on the FSA Register.

In addition to checking this register, always take a business card from the financial adviser, particularly if you are meeting with them away from their offices. This will show you the designatory letters used by the adviser, which will allow you to check with their professional body.

The financial adviser should be a member of at least one professional body, such as the Chartered Insurance Institute (CII) or Institute of Financial Planning (IFP). If they are not, it means they have not subscribed to a code of ethical behaviour.

Another important step to avoid being duped by a fake financial adviser is to never make out a cheque to the firm or individual adviser. Only ever write a cheque for an investment to the administration platform or product provider that has been recommended.

You should certainly never pay in cash when dealing with a financial adviser. The financial adviser should never handle your money.

Any financial adviser promising investment returns that seem too good to be true deserves closer scrutiny, particularly given the current state of the economy.

Whilst offering high investment returns might not always be an indicator of a fake financial adviser, it does suggest dubious advice and greater than disclosed risks to your investments.

If in doubt, seek a second opinion from another independent financial adviser or from a professional adviser, such as an accountant or solicitor.

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