How do you blow $168 million in just a few short years? Surprisingly, it’s not as hard as you might think.
The “financial nightmare” one former lottery winner is now experiencing is not the result of too many fancy cars and first-class trips to Vegas; rather, it’s the confusion that still exists among the public as to what constitutes a “true” financial advisor.
24/7 Wall St., citing reports from Courthouse News Service, posits the lotto winner “may have run into trouble because of his financial advisors.” The winner is suing two licensed attorneys and insurance agents who had opened a branch office of a wealth management company named EFG Capital.
The winner appears to have had “a serious falling out” with EFG Capital over claims from two other people around who really won the lottery or how the winnings were shared. Courthouse News Service reports that possibly in an effort to shield assets, high-value property was purchased, causing the winner to end up in serious debt.
“It also was alleged that the defendants in the case pushed [multimillion-dollar] insurance policies, despite the lotto winner having no children, no siblings and one living parent,” according to the report.
The confusion that leads to this sort of litigation is an ongoing source of frustration for the advisory industry, and something the Financial Planning Association is actively combating.
(Check out 12 Worst Financial Advisors in America: 2013 on ThinkAdvisor.)
The organization’s website has “a consumer side where people can find all sorts of tools," says FPA spokesman Ben Lewis. He also points to the “choosing a financial planner” page specifically as a resource that “gets into the nitty-gritty of how to find a planner. It also includes important questions to ask and other tips for evaluating a financial planner.”
Lastly, he notes two of FPA’s pro bono advice and planning programs:
Financial Planning Week: FPA will celebrate its 12th annual Financial Planning Week in October 2013. During Financial Planning Week, FPA and its nationwide network of chapters host financial planning education activities including seminars, workshops, hotlines and pro bono counseling to help Americans discover the value of financial planning and make smart financial decisions.
Financial Planning Days – FPA, Certified Financial Planner Board of Standards, Foundation for Financial Planning and The U.S. Conference of Mayors work together to provide free financial education to Americans via a series of daylong workshops and one-on-one pro bono financial planning counseling in communities nationwide each year. Financial Planning Days features experts from FPA and highly qualified CERTIFIED FINANCIAL PLANNER™ professionals who provide free, no-strings attached financial counsel and information to underserved communities, young adults and individuals facing special life circumstances or crises.
Financial planners meet with attendees to answer questions on budgeting, getting out of debt, income taxes, dealing with mortgage foreclosures, paying for college, estate planning and insurance, among many other topics.
“My feeling is that by educating the public on what financial planning is and how it can help them deal with their personal financial challenges and goals, they will be better prepared to find a financial planner who can truly help,” Lewis concludes.
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