Is Your Adviser Pumping Up His Credentials?

scam financial-advisor

In a written statement to the Journal, the CFA Institute’s general counsel, Jeannie Anderson, said the institute “has not granted AAFM any special rights to use the MFP designation and has no relationship or affiliation with AAFM.”

The CFP Board says the AAFM once helped provide continuing education for CFPs, but hasn’t done so since 2006. “He should not have that on his site,” says spokesman Dan Drummond.

Mr. Mentz says the CFA Institute and CFP Board signed an agreement stating that “we won’t object to their credentials and they won’t object to ours.”

For some advisers, easily obtained credentials provide an extra edge with clients.

Consider allegations made against Carl Wyllie, CWP, FICF, LUTC. Those stand for certified wealth-transfer practitioner, fraternal insurance counselor fellow and life underwriter training council fellow. In 2002, Mr. Wyllie, who was then based in Omaha, Neb., met with a local couple, Marilyn and Donald Hooper, Mrs. Hooper says.

She says she recalls Mr. Wyllie mentioning his credentials as a sign of his expertise and seeing them “on his wall, on his business card, in his advertisement and his literature.” She adds: “Anytime you look at a financial adviser, just like with a doctor, the more accreditations they have, the more you think they’re reputable. I think it’s as simple as that.”

Mr. Wyllie says “I never used my credentials to market myself, not really. I had them on my [business] card, but I didn’t really flaunt them.”

In 2005, the Hoopers brought a lawsuit in Douglas County district court in Nebraska against the parent company of a brokerage at which Mr. Wyllie had been a salesman. In the suit, the Hoopers alleged that Mr. Wyllie persuaded them to liquidate the $105,000 balance in Mr. Hooper’s retirement fund and put the proceeds in an unregistered stock called Capital Equity Fund. Mr. Hooper incurred a surrender charge of more than $10,000 to liquidate an annuity in his retirement fund.

Ruling against the defendants, the court found that Mr. Wyllie had given the couple a brochure that said Capital Equity had “no stock market risk” and was a “great investment vehicle for seniors.” The Hoopers lost approximately 55% on Capital Equity Fund in 18 months.