Choosing a financial adviser
Folk who gave suspected Ponzi schemer David Ross their money are crying now.
So far just over $10 million of the $450m of the money Ross was supposedly looking after for his clients, who were just ordinary people, has been located.
And yet the Wellington-based Ross was an authorised financial adviser and chartered accountant.
Former newspaper columnist Andrew Robinson, also an authorised financial adviser, is now also being investigated by the Serious Fraud Office after clients became concerned about what had happened to their money.
If you can't trust someone with such lofty badges of honour, how on earth do you find a financial adviser you can trust?
Lots of people suddenly find themselves with a large "chunk of change" to invest. For some it is from the sale of a business, for others it's money left to them in a will, or an insurance payout, or a pension fund maturing.
Not everyone feels competent and confident enough to invest for themselves.
But don't despair. There are trustworthy, competent advisers, and they aren't that hard to find.
When approaching any money decision, the key is to nut out what you want and then come up with an action plan to get it.
A retired farming couple who lost an eyewatering sum of money on imprudent investments told me once that people choosing an adviser are hiring someone to do a job for them, and you should approach it as if you were the boss of a company looking to fill an important position.
You need a full CV, not just the potted highlights of the disclosure statements.
You need to know every organisation they have worked for or operated, and research them.
I suggest people who have stuffed up badly once should not be given a second chance with your money.
Ask potential candidates to provide client references so you call up them up.
Ask the adviser how they operate, and ask again, and again, until you understand who they are, how they are going to understand your needs, serve you, keep your money safe, and how they are going to be paid.
Pay particular attention to how your money will be handled. At all times money MUST be held by independent third parties, NEVER by the adviser themselves.
Don't worry if all this seems like you are putting them through the ringer. You are.
Oh, and don't just interview one. Like the business owner looking for a new employee, you need options, and this might include advisers from big chains like AMP, Camelot, New Zealand Financial Planners or Spicers, as well as bank advisers (they have specialist advisers too), as well as smaller independent practices.
If it takes a bit of time, fine. The money can sit in the bank.
The Financial Markets Authority, the one which authorised Ross as an adviser, has a good guide to picking an adviser.
Sorry if this all sounds a bit hard, but think of it this way: Nest eggs take a lifetime to amass. They deserve protecting.
Rob Stock is a finance journalist in the Fairfax Business Bureau and money editor of Sunday Star-Times.