Protect Yourself: Ask First!

Many of us need legal, financial, retirement, accounting, estate, long-term care or similar planning services. We seek help from planning advisors possessing the necessary training. Many planning advisors are well-qualified and capable, and make fair disclosure of pertinent information to their clients. Unfortunately, unqualified or dishonest individuals masquerade as expert planning advisors. Many of them provide sub-standard services or have hidden financial motives in providing their "planning services."

The California Attorney General recently cracked down on one company that was giving estate planning advice, and selling living trusts to Older Adults in California. According to the Attorney General’s Office, the company would find out all about an Older Adult’s finances and investments as part of the living trust planning process. Then the Older Adult would be approached to buy annuities, after selling or exchanging their existing investments. Annuities can generate significant up-front commissions for the seller, and over $200,000,000 of annuities were sold this way.

Other groups have seen the financial success of the trust-annuity sales gimmick, and adopted it as their model. Some are using a slightly different approach – they offer advice on long-term care planning, including Medi-Cal. Their real motivation, however, is still to sell annuities. They only give part of the picture, and stress that some annuities don’t count as assets under Medi-Cal’s eligibility rules. They’re pushing lots of unsuitable annuities this way, and getting paid large commissions.

This growing problem points out the need to know, in advance,

	if the new advisor has legitimate professional credentials,
	if the person will serve as a fiduciary and put your interests first, and
	how the new advisor gets paid.

H.E.L.P. has developed the Ask First! form as a tool to help you. See the end of this page for a link to the Ask First! form. Using the Ask First! form, you ask the advisor to disclose in writing his or her credentials and ways of being paid. Keep a copy of the form handy. Use Ask First! at the beginning, before you start a relationship with a new advisor.

	If the person is reluctant to complete the form, take this as a warning.
	If the person will not put your interests first, take this as a warning.
	Review the person's answers, and look for missing or inconsistent information.
	Check out the person's licenses and other credentials, and past complaints and sanctions.
	If the person doesn't answer all the questions, or if the answers make you uncomfortable, or if the answers do not "check out," do not do business with the person. Look for another advisor!

At the same time you use Ask First! be sure to ask for and check the advisor’s references.