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Waste of time? Market decline, glut of unusable products threaten recycling programs

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Robotic mop among new offerings at NEPA Home & Garden Show

<p>Gaylen Rust must have seemed trustworthy to the people who gave him money.</p><p>Rust was a longtime businessman in Layton, Utah, where he ran a coin shop started by his father in 1966. Rust also founded a charity called Legacy Music Alliance that funded arts programs in schools. An admiring 2013 profile in The Salt Lake Tribune called Rust &#8220;the state&#8217;s biggest proponent of arts education.&#8221;</p><p>Federal and state regulators, however, say Rust was running a Ponzi scheme. Civil lawsuits filed late last year by the Securities and Exchange Commission , the Commodity Futures Trading Commission and the Utah Division of Securities say Rust, his wife and one of his five children persuaded hundreds of friends, customers and business associates across the country to invest more than $200 million in a bogus silver trading pool.</p><p>When scam artists target groups of people who know each other or have something else in common, such as religion, it&#8217;s known as &#8220;affinity fraud.&#8221; And it&#8217;s one big reason why you shouldn&#8217;t rely solely on recommendations from friends and family when choosing a financial adviser .</p><p>&#8220;If anything, word-of-mouth recommendations are even more important to the con artists than to the legitimate adviser,&#8221; says Barbara Roper, director of investor protection for the Consumer Federation of America. &#8220;Where else are they going to find their victims?&#8221;</p><p>Asking friends and family for referrals isn&#8217;t a bad way to begin your search for an adviser, Roper says. Just don&#8217;t assume your loved ones have done their due diligence.</p><p>The people who invested with Rust ignored several big red flags. According to the actions filed:</p><p>&#8226; He wasn&#8217;t registered in the securities industry.</p><p>&#8226; He claimed consistently high returns, saying he averaged 20 percent to 25 percent annually and never less than 12 percent.</p><p>&#8226; He didn&#8217;t use a third party, such as a brokerage firm, to issue account statements and instead provided investors with spreadsheets showing purported transactions.</p><p>Promises of high returns with little or no risk are a classic sign of fraud, as are statements generated without supervision by a third party, Roper says.</p><p>Advisers who aren&#8217;t actual scam artists may still have checkered histories. One research team found that one out of every 14 advisers registered with Financial Industry Regulatory Authority, a private self-regulatory organization, had records of serious misconduct such as fraud, forgery or unauthorized trading. Thirty percent of that group had multiple offenses, says Mark Egan, a professor at Harvard Business School and a co-author of the study.</p><p>&#8220;Advisers who have engaged in the misconduct in the past are five times as likely to engage in misconduct again in the future,&#8221; Egan says.</p><p>Even advisers who don&#8217;t run afoul of regulators can be bad news if they don&#8217;t put their clients first or are simply incompetent. To protect yourself, Roper recommends the following steps to vet financial advisers:</p><p><strong>Make sure the adviser is properly registered. </strong>Financial advisers should be registered either as a broker/dealer or as an investment adviser, Roper says. You can start at BrokerCheck, FINRA&#8217;s free online tool. If the person you&#8217;re checking out is an investment adviser rather than a broker, the tool will send you to the Investment Advisor Public Disclosure database. Either way, you should see their employment and disciplinary histories.</p><p><strong>Take any disciplinary history seriously.</strong> Sometimes minor complaints end up in the databases, but typically the misconduct reported is serious, Egan says. At the very least, it&#8217;s worth talking to the adviser about what you find if you&#8217;re already a client. If you haven&#8217;t hired this person, keep looking, since most advisers never run afoul of regulators.</p><p><strong>Look for, and verify, the right credentials. </strong>People offering money advice should have at least one credential that signifies a rigorous financial education and adherence to a code of ethics, such as certified financial planner (CFP) or chartered financial analyst (CFA), Roper says. CPAs who are personal financial specialists (PFS) meet requirements similar to a CFP. You can verify an adviser&#8217;s credential at the sites of the organizations that granted them &#8212; the CFP Board of Standards, the CFA Institute and the American Institute of Certified Public Accountants, respectively.</p><p>You can check out any unfamiliar credentials at FINRA&#8217;s site to see how much effort and education is required to obtain them, Roper suggests.</p><p>&#8220;Just the fact that an individual has a string of letters after their name,&#8221; she says, &#8220;doesn&#8217;t mean they represent any valid area of expertise.&#8221;</p><style>
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<div class="neCaption">FILE - This April 2017 file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. (NerdWallet via AP, File)</div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2019/02/web1_f0c5d0644d02471d8f00bcd54538fdd5-075a35b6ccd648a4b70ba40b2690afc1-0.jpg</photo0><caption0>FILE - This April 2017 file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. (NerdWallet via AP, File)</caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>Liz Weston</p><p>Guest Columnist</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Liz Weston is a columnist at NerdWallet, a certified financial planner and author of &#8220;Your Credit Score.&#8221; Email: lwestonnerdwallet.com. Twitter: lizweston. </p></shirttailMeta></div>

Their view: Don’t let others pick your financial adviser