Read your LinkedIn news feed with a skeptical eye, and think twice before replying to an email from a financial adviser seeking your business this week.
The Dow Jones Industrial Average DJIA, -2.13% plunged 831 points Wednesday in the worst day since the market correction last February and tumbled another 650 points Thursday afternoon. The S&P 500 SPX, -2.06% index and the Nasdaq Composite Index COMP, -1.25% were also down Thursday. Understandably, many people are concerned about what this means for their 401(k) accounts and, for those who are already drawing income from their retirement accounts, it’s especially worrying.
“What they are selling is exactly what they should not be doing,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors in Oklahoma City. Statements like “Your retirement is at risk!” at a time of extreme market volatility are not uncommon when hustling for business. “I hear and see those same advertising and news stories online and on the radio,” Courtney said. “They try to take advantage of the situation.”
“It’s always been a part of our profession,” said Frank Paré, the 2018 president of the Financial Planning Association, who is based in Oakland, Calif. “Whether it’s fear or greed, it’s par for the course.” He recommends avoiding anyone attempting to play on your emotions with statements like “Get in before it’s too late!”
‘Proceed with caution when you sense that someone is trying to sell fear.’
Jared Snider, Exencial Wealth Advisors
When financial advisers market themselves, they have certain compliance requirements under the Financial Industry Regulatory Authority or the Securities and Exchange Commission. “They cannot make unsubstantiated claims,” said Morey Stettner, a consultant, contributor to MarketWatch and author of “Skills for New Managers.”
Stettner sees inappropriate