Financial planning may be a leading growth industry, but it has little regulation. Although the majority of financial planners are legitimate, the potential for trouble is there. Almost anyone can hang up a sign that proclaims he or she is in the business. Even the number of financial planners in existence is open to doubt because the process of certification is so loose. As a result, the extent of enforcement actions and the amount of investor losses have increased considerably. Statistics from 1986 — the most recent data available—show that 22,100 investors lost more than $396 million in that year. We all need to be alert to the possibilities of fraud and to what to look for when a financial planner is sought.
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