AARP The Magazine - January/February 2010

disclosed against Kearney’s own. The jury cleared Kearney, and the Vargases are appealing the verdict.

California is one of a handful of states in which broker-dealers have a fiduciary duty. Elsewhere federally registered investment advisers are fiduciaries, but broker-dealers aren’t. Muddying even this double standard, “many investment pros wear both hats,” says Tom Selman, executive vice president of FINRA, the Financial Industry Regulatory Authority, which helps oversee broker-dealers. This leaves consumers to wonder, When is my trusted adviser not worth trusting?

A coalition of groups representing financial planners and investment advisers says it’s time to retire that riddle. These groups would like a fiduciary duty to apply anytime any financial professional gives advice. Congress is considering a uniform standard; it remains to be seen whether this standard will match the rigors of fiduciary duty or get watered down. • HOW TO PROTECT YOURSELF NOW Investment peddlers often use high-pressure tactics that may start with a pitch at a free lunch or dinner seminar. To avoid investing in something that’s inappropriate for you or too costly:

Be patient Don’t get pressured into signing any documents without taking the time to think about the investment and getting a second opinion from a trusted friend, adviser, or lawyer.

Be informed Consider hiring a certified financial planner who is bound by a code of ethics to guide you objectively; then, purchase any recommended investments elsewhere.

Be prepared AARP and FINRA have developed a list of questions you should always ask before investing. See aarp.org/nofreelunch and click on “Free Lunch Seminars: Questions to Ask a Financial Professional.” ;