How to avoid being ripped off by a financial advisor: 3 simple checks

It is alleged that Sydney-based financial advisor, Melissa Caddick stole $25 million from her clients. She has recently gone “missing”, leaving a trail of disaster for her clients and family members.
Many con artists are very cunning and go to great lengths to conceal their wrongdoings. But there are a few simple steps you can take which will virtually eliminate any chance of you being ripped off.
An advisor must be an independent intermediately, not a fund managerVirtually all fraud committed by financial advisors occurs when the advisor is in control of the investments. That is, they are investing the money on behalf of their clients. This impairs their independence and allows them to manipulate information.
That is why you must demand absolute independence from any advisor you deal with. Your advisor’s job is to hire and/or fire fund managers (based on performance), not be a fund manager themselves. This allows the advisor to always represent your best interests. They are an intermediatory between you and the business investing your money, holding them accountable.
At ProSolution, we invest in a variety of managed investments and Exchange Traded Funds (ETFs). At any time, our clients can go directly to the fund managers or ETF providers website to check on the investments and performance. It is a very transparent arrangement. Transparency is the enemy to fraudsters.
Make sure there’s good internal controlsIt is acceptable to allow your financial advisor to make investments on your behalf. In fact, that’s what you are paying them to do. However, they should not have any ability to withdraw funds.
For example, we use an investment platform to invest our clients’ monies. We can invest any monies on the platform, but we cannot withdraw money from that platform. Only our clients are able to do that. This add another layer of protection.
A custodian should hold your assetsAll reputable investment platforms and fund managers use a custodian to hold all investment assets. A custodian protects the investor from counterparty risk. For example, if you use Macquar

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