Apr. 21, 2010: Bonnie Kirchner's Who Can You Trust With Your Money?

PICKING A FINANCIAL PLANNER

YOU CAN TRUST CAN BE HARD.

BONNIE KIRCHNER OUGHT TO KNOW,

SHE WAS ONCE MARRIED TO BRAD

BLITHE WHO HATCHED A PONZI

SCHEME.

BONNIE KIRCHNER HAS WRITTEN A

GUIDE TO MAKE SURE YOUR MONEY

IS SAFE, CALLED "WHO CAN YOU

TRUST WITH YOUR MONEY "".

WELCOME, BONNIE.

>> THANK YOU FOR HAVING ME.

HOW CAN YOU KNOW WHO TO TRUST?

YOU WERE MARRIED TO BRAD

BLITHE, AND PEOPLE TRUSTED HIM

WITH MILLIONS OF DOLLARS, THE

MASONS UP ON THE NORTH SHORE,

THIS IS A LOCAL GUY RUNNING

HIS OWN, HE WOULD BE THE

PERFECT PERSON YOU WOULD THINK

YOU WOULD TRUST.

>> ESPECIALLY IF YOU SAT DOWN

WITH HIM, BECAUSE HE IS

EXTREMELY CHARMING, VERY

DISARMING, AND THAT'S ONE OF

THE REASONS WHY PEOPLE CANNOT

JUST GO AT FACE VALUE WHEN

THEY'RE HIRING A FINANCIAL

ADVISOR, THEY NEED TO DO THEIR

DUE DILIGENCE AND MAKE SURE

THEY ARE GOING THROUGH THE

PROCESS PROPERLY AND CHECKING

THIS PERSON OUT BEFORE THEY

PUT HIM TO WORK.

AND EVEN AFTER THEY PUT THEM

TO WORK.

>> YOU'RE A CERTIFIED PLANNER

YOURSELF.

YOU DIDN'T KNOW WHAT YOUR

HUSBAND WAS UP TO?

>> I WAS CONNED BY THE MAN AS

WELL.

HE, AS I MENTIONED, VERY

LIKEABLE, VERY DISARMING, I

WAS IN LOVE WITH THE MAN AT

ONE POINT IN MY LIFE.

THERE WAS REALLY NO WAY FOR ME

TO KNOW, BECAUSE HE WENT TO

GREAT LENGTHS TO MAKE SURE

THAT NOBODY KNEW.

THAT I DIDN'T KNOW, OTHER

FAMILY MEMBERS, HIS EMPLOYEES,

THE PEOPLE THAT WORKED

DIRECTLY FOR HIM WITH A LOT OF

THOSE CLIENTS DIDN'T KNOW

EITHER.

INCLUDING THE REGULATORS.

THEY CHECKED US OUT, THEY

DIDN'T COME ACROSS ANYTHING

THAT MADE THEM SUSPECT.

AND CERTAINLY HIS CLIENTS WHO

BECAME HIS VICTIMS.

>> HE WAS SENDING OUT REGULAR

FINANCIAL STATEMENTS, MONTHLY

STATEMENTS OF THESE PEOPLE'S

PORTFOLIOS.

SOME PEOPLE DID TRY TO TRACE

THE SECURITIES AND THINGS AND

COULDN'T DO IT BUT JUST GAVE

UP RATHER THAN TURN HIM IN.

>> I THINK YOU HAVE A

SITUATION AND THIS IS ACTUALLY

ONE OF THE RED FLAGS THAT YOU

SHOULD LOOK OUT FOR, WAS A

COMMON THEME WITH BRAD AND

BERNIE MADOFF, WHERE CUSTOMERS

WERE RECEIVING DECENT RETURNS,

NOT ANYTHING OUTLANDISH, BUT

VERY DECENT RETURNS DURING

PERIODS OF VERY DIFFICULT

MARKET VOLATILITY.

SO THAT SHOULD BE A RED FLAG

TO ANYBODY, BECAUSE MOST

PORTFOLIOS WILL REACT WHEN

THERE'S NEGATIVITY IN THE

MARKET, IT MAY BE A LITTLE,

MAY BE A LOT, BUT YOU'RE NOT

GOING TO HAVE CONSISTENT

RETURNS MOST LIKELY AT THE

LEVEL THAT HE WAS SHOWING ON

THE STATEMENTS.

>> MOST PEOPLE GO TO THESE

HUGE FINANCIAL FIRMS, AND SEEK

SOMEBODY OUT.

YOU'RE LESS LIKELY TO GET

SWINDLED IN A SITUATION LIKE

THAT, TRUE OR NOT?

>> SWINDLES, NO.

BUT TAKEN ADVANTAGE OF,

POSSIBLY.

AND THAT'S WHAT SOME OF THE

THINGS I GO OVER IN THE BOOK

IS NOT ONLY THE THIEVES LIKE

BERNIE MADOFF AND BRAD BLIGHT,

BUT THERE ARE PEOPLE OUT THERE

WHO ARE MORE THAN CONCERNED

ABOUT LINING THEIR OWN POCKETS,

THERE ARE THOSE THAT ARE

INCOMPETENT.

SO I'M TRYING TO SHOW PEOPLE

THE DIFFERENCES, SO THEY CAN

BE AWARE IF THEY'RE IN A

DYSFUNCTIONAL RELATIONSHIP NOW

WITH THEIR ADVISOR OR MAKE

SURE THEY DON'T GET INTO ONE.

>> I THINK PEOPLE ARE

INTIMIDATED ABOUT SPEAKING UP

TOO, IF YOU NOTICE THEY'RE

TAKING FEES OUT OF YOUR

ACCOUNTS AND YOU HAVE ANOTHER

ACCOUNT AND THEY'RE TAKING

FEES OUT OF THAT TOO, YOU'RE

GOING WAIT A SECOND, WHY DON'T

WE JUST TAKE FEES OUT OF ONE

ACCOUNT.

THEY DON'T WANT TO ASK.

>> WELL, IT'S YOUR MONEY.

AND YOU HAVE EVERY RIGHT TO

KNOW.

AND THERE MAY BE A FULL

EXPLANATION WHY THAT FEE

EXISTS.

BUT IF YOU DON'T UNDERSTAND IT,

THEN YOU SHOULD ABSOLUTELY

QUESTION IT.

AND YOU SHOULDN'T STOP UNTIL

YOU FEEL COMFORTABLE.

>> SOME OF THE ADVICE IN HERE

IS PRETTY BASIC, AND I'M

THINKING ARE MOST PEOPLE KIND

OF DUMB ABOUT THEIR MONEY?

>> I DON'T KNOW THAT PEOPLE

ARE DUMB ABOUT THEIR MONEY.

BUT THEY DON'T MAKE IT THE

PRIORITY THAT THEY SHOULD.

THIS IS A BIG PROBLEM IN OUR

COUNTRY THAT WE SPEND MORE

TIME ON THINGS LIKE PLANNING

OUR VACATIONS, THAN TAKING THE

BASIC STEPS WE NEED TO TAKE IN

ORDER TO BE FINANCIALLY SECURE

AND MAKE SURE THAT WE'RE

WORKING WITH SOMEBODY WHO IS

TRUSTWORTHY AND DOING A GOOD

JOB FOR US.

SO PART OF WHAT I RECOMMEND IN

THE BOOK IS DOING A FINANCIAL

CHECKUP FOR YOURSELF, SO YOU

UNDERSTAND WHERE YOU STAND.

AND THAT'S GOING TO HELP YOU

HIRE THE PROPER PERSON FOR

YOU, AND IT MAY CONVINCE YOU

THAT YOU DON'T NEED TO HIRE

SOMEBODY AT ALL.

THAT YOU CAN WORK ON THESE

THINGS YOURSELF.

YOU JUST NEED TO EDUCATE

YOURSELF A LITTLE BIT.

>> GOING BACK TO THE TRUST

ISSUE HERE, I'M TRYING TO

FIGURE OUT HOW WOULD YOU KNOW

IF YOU'RE A COMMUNITY OF

PEOPLE LIKE SAY THE MASONS UP

ON THE NORTH SHORE AND THEY

SAY WE NEED A GOOD GUY TO

MANAGE OUR INVESTMENTS, WE'RE

A FRATERNAL ORDER, WE DON'T

HAVE A LOT OF MONEY, BUT WE

HAVE SOME AND WE HAVE A LITTLE

PERSONAL MONEY.

SO YOU FIND SOMEBODY.

IT'S LIKE WHAT KIND OF RED

FLAG SHOULD THAT GROUP OR ANY

GROUP WITH SOMEBODY LIKE BRAD,

WHAT SHOULD HAVE SET THEM OFF?

>> BRAD WAS A MASON HIMSELF,

SO HE WAS A NATURAL SELECTION

FOR THEM.

BUT THAT SHOULDN'T BE THE ONLY

BASIS THAT YOU USE IN ORDER TO

HIRE SOMEBODY.

IT CAN BE A GOOD START, AND I

RECOMMEND THAT PEOPLE TALK TO

THEIR OTHER ADVISORS --

>> THAT THEY NOT TAKE A

FRIEND?

>> NOT NECESSARILY, BUT EVEN

IF YOU'RE GOING THAT DIRECTION,

DON'T JUST JUMP IN WITH BOTH

FEET AND WHOLE HEARTEDLY.

MAKE SURE YOU STILL TAKE THE

STEPS TO CHECK THEM OUT, KUDO

THAT THROUGH THE S. E. C., OR

PROFESSIONAL ORGANIZATIONS

THAT THEY MAY BELONG TO.

THERE ARE WAYS TO LOOK AT THIS

PERSON FROM DIFFERENT

PERSPECTIVES IN ORDER TO

FIGURE OUT WHETHER OR NOT THEY

ARE STILL GOING TO BE A GOOD

FIT.

AND EVEN AFTER YOU HIRE

SOMEBODY, THERE ARE STEPS YOU

SHOULD TAKE JUST TO MAKE SURE

THAT THEY'RE DOING THE THINGS

THEY SAY THEY'RE GOING TO DO.

>> HERE'S SOMEBODY WITH MODEST

LIMITED RESOURCES, BUT YOU

WANT TO BUILD A PORTFOLIO,

LET'S SAY YOU HAVE $20,000 OR

SOMETHING LIKE THAT, DO YOU

RECOMMEND THAT PEOPLE PUT ALL

OF THEIR MONEY WITH ONE PERSON

OR DO YOU SAY YOU SHOULD BE BE

CONSERVATIVE AND SAVE SOME, OR

NOT?

>> WELL, THAT'S A GREAT

QUESTION, AND IT ONE THAT'S

COME UP SENSE THE BERNIE

MADOFF SITUATION OCCURRED.

PEOPLE ARE NOW LOOKING AT,

INSTEAD OF JUST WORKING WITH

ONE ADVISOR, NOT PUTTING ALL

THEIR EGGS IN ONE BASKET AND

DEVERSE FILING.

THE PROBLEM WITH THAT IS THINK

ABOUT THE FACT THAT WE HAVE

TROUBLE ENOUGH GETTING ONE

ADVISOR IN PLACE, AND NOW HAVE

YOU TO MANAGE THREE OR FOUR.

SO IT'S A GREAT IDEA, BUT I

THINK IT'S A LITTLE BIT

UNREALISTIC, AND I THINK IF

YOU TAKE THE PROPER STEPS TO

HIRE SOMEBODY WHO IS GOING TO

TAKE GOOD CARE OF YOU, THEN

YOU DON'T NECESSARILY NEED TO

DIVERSIFY, DEPENDING ON YOUR

LEVEL OF WEALTH.

>> I THINK A LOT OF PEOPLE GOT

NERVOUS WITH THE RECENT MARKET

CRASH AND PERHAPS KEEP THE

MONEY UNDER THE MATTRESS AT

THIS POINT.

>> WELL, ONE OF THE THINGS TOO

IS THAT YOU DON'T WANT TO PUT

ALL OF YOUR MONEY IN WITH AN

ADVISOR.

EVERYONE SHOULD HAVE AN

EMERGENCY FUND, AND QUITE

FRANKLY I COULD NOT HAVE

GOTTEN THROUGH WHAT I GOT

THROUGH IF I DIDN'T HAVE ONE.

>> SO YOU HAD YOUR OWN

PERSONAL FUND?

>> I HAD MY EMERGENCY FUND,

WHICH I RECOMMEND TO ALL MY

CLIENTS.

>> DID YOU YOUR HUSBAND KNOW

YOU HAD IT AT THE TIME?

>> HE DIDN'T REALLY KNOW, I

DIDN'T KNOW ABOUT HIS FINANCES,

HE DIDN'T KNOW ABOUT MINE, IT

WAS A SECOND MARRIAGE AND

QUITE FRANKLY HE WASN'T REALLY

CONCERNED WITH MINE AND I

WASN'T CONCERNED WITH HIS.

HE HAD CHILDREN TO TAKE OF, I

DIDN'T.

>> DID IT EVER SEND A RED FLAG

THAT YOU DIDN'T OWN A HOME AT

THE TIME, YOU WERE RENTING,

WONDER WHY WE DON'T HAVE A

NICE HOUSE.

WE HAVE ALL THIS MONEY WE'RE

MANAGING.

>> THAT'S CERTAINLY A QUESTION

THE F.B.I. ASKED ME, THE S. E.

C., ASKED ME THAT.

BECAUSE IT WAS A SECOND

MARRIAGE I HAD MOVED OUT OF

BOSTON TO THE NORTH SHORE IN

ORDER TO BE WITH BRAD AND HIS

CHILDREN.

AND WE WERE TRYING TO MAKE A

DECISION ONCE THE KIDS WENT

AWAY TO SCHOOL WORKS WE LIVE

IN BOSTON OR STAY ON THE NORTH

SHORE.

ALSO AT THAT TIME, REAL ESTATE

PRICES WERE PRETTY INFLATED

AND I JUST COULDN'T SEE MAKING

THAT KIND OF INVESTMENT AT THE

TIME.

>> HE'S SERVING AN 11-YEAR

SENTENCE IN A FEDERAL PRISON.

DO YOU FWHEE WILL HAPPEN TO

HIM WHEN HE COMES OUT?

>> I HAVE NO IDEA.

IF HE'S SMART HE WON'T COME

BACK TO BOSTON.

>> ALL RIGHT, BONNIE KIRCHNER,

WHO CAN YOU TRUST WITH YOUR

MONEY.

THANKS FOR COMING.

>> THANK YOU FOR HAVING ME.

>> THAT IS IT FOR "GREATER

BOSTON".

TOMORROW NIGHT, THE PAROLE

HEARING IN THE CONTROVERSIAL

CASE OF CONVICTED RAPIST BEN

LEGUERRE, ANOTHER PAROLE

HEARING I SHOULD SAY.

THAT'S TOMORROW AT 7:00.

I'M EMILY ROONEY.

GOOD NIGHT.