Clients can check an advisor’s credentials by going to the accreditation bodies, such as FP Canada for those who hold the CFP designation and confirm if the advisor’s status is in good standing and active.winyoo08/AFP/Getty Images
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One glance at a list of unopened e-mails and some are likely to be some sort of investment or financial scheme. But what if the sender’s name was an advisor’s, asking the client for a deposit? According to the Canadian Securities Administrators (CSA), there has been an increase in scammers impersonating legitimate financial advisors and financial planners.
Mark McGrath, certified financial planner (CFP) and wealth advisor with Sweeney Bride Strategic Wealth Advisory at Wellington-Altus Private Wealth Inc., says the issue of someone posing as him is not something that has come up with clients, but concedes that perhaps it should. After all, he has never met most of his clients in person. He has clients residing in several provinces, while he works out of his home office in Squamish, B.C., and books 99 per cent virtual meetings.
But because he writes several posts each week about best financial planning practices on social media platforms such as LinkedIn and Twitter, perhaps clients feel confident they could red flag a suspicious e-mail from him, he says. Mr. McGrath also spends a lot of time interacting and engaging with clients and prospects online.
“I talk about highly technical financial topics online and that’s very difficult for somebody to impersonate,” he says.
The first step to preventing fraudulent activity is proving to prospects you are, in fact, who you say you are, he says.
Clients can check an advisor’s credentials by going to the accreditation bodies, such as FP Canada for those who hold the CFP designation and confirm if the advisor’s status is in good standing and active. They can also confirm if an advisor is in good standing with CSA by looking up their licences on its national registration search.
Mr. McGrath says LinkedIn can be effective in verifying identity as each profile provides space for credentials, a professional photo and employment information.
“A well-constructed profile by itself indicates this is a real person and actually does this job for a living,” he says.
Inform clients of the process
Nadege Koskamp, CFP, senior financial consultant and division manager at IG Wealth Management in Toronto, sees the potential for fraud happening more.
“It’s definitely something that has been on my mind and made me a little more conscious,” she says.
While she hasn’t been impersonated, she is often asked if she’s the same Nadege who runs several local bakeries. She is not.
Her philosophy on fraud means arming clients with information to prevent it from happening. She goes over her process for gathering information a few times a year, and more frequently with elderly clients as the scams evolve constantly and often target that demographic.
“At every meeting or anytime they’re looking at contributing funds, we’re also having a conversation about fraud,” she says.
If Ms. Koskamp sends over a document for clients to sign, they know to also expect a telephone call directly from her. At that time, she’ll explain the document verbally in greater detail.
“They know they won’t receive an e-mail from me asking them for an e-transfer because I already have access to their accounts and whenever any money is deposited, I’ll call them,” she says.
Requests are never made out of the blue
Alim Dhanji, senior financial planner and senior insurance advisor at Assante Financial Management Ltd. in Vancouver, also takes measures to protect clients from fraud.
As most of his clients reside in the Greater Vancouver Area, he meets with all of them face-to-face at least once a year. His firm has a process for requesting information. One rule of thumb emphasized to clients is that requests are never out of the blue.
“Our requests are either follow-up [action points] from a meeting or part of a process we follow every year,” Mr. Dhanji says.
As an example, he might e-mail clients about gathering all their slips to prepare for income taxes, something he does every year. But he will never ask a client to make a deposit for an investment. That’s the sort of thing discussed on the phone or more preferably as part of a face-to-face meeting.
“You want to make sure that your clients know what to expect, so they’re comfortable and aware of what might be coming,” he says.
When in doubt about any correspondence coming from him or his team, he advises clients to double-check by phoning. Sometimes, if clients look closely at an e-mail, they can see that while the name is correct, the e-mail address is slightly off, missing some letters.
“Never react to urgent requests over e-mail, as urgency also requires a phone call,” he says.
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