If Bowser, your big, tough watchdog, was asleep in his doghouse as prowlers raided and trashed your house, you might consider kicking him out the door. Bowser’s job was simple: bark his head off and scare the pants off the intruders. He might have even taken a chunk off the thieves’ bottoms as they ran away. His failure to protect you and your possessions would leave a lasting impression.
The damage done transcends the loss of physical objects. Objects can be replaced, mostly, but the feelings of having been violated and having lost security endure.
Now, replace inept Bowser with another watchdog, the Securities and Exchange Commission. Better known as the SEC, this federal organization has been given the power to monitor the thieves in the investment industry. How good is the SEC at protecting us? On the whole, the SEC has done an extraordinary job at stopping the bad guys. For the most part, we can rest assured that our money will still be there when we wake up.
Unfortunately, due to funding cuts at the SEC and the cleverness of the thieves, we have a responsibility to wake up our own watchdogs: ourselves. Although you might not like the idea of having to police your investments, you cannot ignore potential risks, merely hoping for the best. A wiser approach is to take a few simple steps.
First step, make sure your financial investment manager, whether it be a broker/dealer, a registered investment adviser or other financial entity, is supervised by a government agency such as the SEC or state regulators. Verify that the manager is in good standing with the agency.
Second step, you should also investigate whether the individual with whom you work has ever received a fine, penalty, or other mark against his record. If so, kick him out the door like Bowser. Let me repeat, check out the individual giving you investment advice.
If you think that you are victim of fraud, contact the regulators to report a violation, and find a person who is trusted and respected to help provide protection for you.
• Amy L. Barrett is a financial adviser and founder of Barrett Wealth Connection LLC. based in Spring Grove. Send comments to firstname.lastname@example.org.