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.”