What follows is a snippet of how an unscrupulous financial advisor took advantage of an elderly woman by withholding/misrepresenting important information with respect to investments he was making in her behalf. Most financial advisers are relatively honest since their reputation is everything with regard to retaining their client base. However, Alice’s adviser seems to have not practiced fair disclosure with a REIT probably due to the fact that he would receive a hefty commission. Had Alice known there was a financial penalty for early liquidation of the REIT, she probably would not have bought a position in it.
The snippet comes to us from a post titled Edler Financial Abuse under our noses? at AgingParents.com. Please go to this site to read the full and informative article that should serve as a great aid to any of you who feel your parents might be victims of unethical actions from their financial advisers.
More subtle forms of elder deprivation are taking place daily right under our noses with respect to state funded nursing homes like Lakeland Village in Washington. Debbie Benefield wrote a nice letter fleshing out the details of elderly abuse that can and do happen far more commonly than many realize!
Alice decided to change financial advisors because the guy she was using for advice made her nothing for a solid year while the stock market was doing well. It was then that she learned, and we did, that her advisor had done something Alice is very upset about. He had taken 10% of her investable assets and put them into a real estate investment trust (REIT) that could not be liquidated without a substantial financial penalty. The money is tied up for 12 years. She is not a sophisticated investor and relies on others for advice and she relied on him a lot. She says the advisor never explained that she would not be able to access the funds if she needed them unless she suffered a significant loss. Plus that nice commission he took up front. He, of course says he told her all about it and she agreed.