Advisers warn clients to watch out for Haiti scams

Advisers are warning their clients to donate only to well-known organizations if they want to help victims of the Haiti earthquake.
JAN 18, 2010
Advisers are warning their clients to donate only to well-known organizations if they want to help victims of the Haiti earthquake. Scams are always a concern, of course, and this time advisers are taking a proactive approach by sending out e-mails to clients that provide pointers about potential scams to avoid and guidelines on how to research charity groups. Rand Spero, a principal at Street Smart Financial LLC, which manages $23 million in assets, cautioned his clients not to contribute to a telemarketer. He has also urged them to be careful about e-mail solicitations from organizations they've never heard of. Mr. Spero recommended instead that clients perform the same kind of due diligence they would when researching an investment. “When people are responding to a crisis why not deal with established firms,” he said. “No one's been able to make a convincing argument to me to donate to an organization that's not established. It's not like a speculative stock. This is not something you want to be speculative toward.” Mr. Spero said he has spoken with clients about donating to established organizations like Doctors Without Borders and the American Red Cross. He also encourages clients to go to the website of GuideStar, which is an organization that analyzes non-profit groups, including how they compensate executives and their annual fundraising efforts. Because of the fear of scams, Lon Dolber, president and chief executive of American Portfolios, a broker-dealer with $11 billion in assets, sent out a release on his firm's intranet to advisers encouraging them to donate to the American Red Cross. His firm donated $2,500 to the Red Cross. “We're steering all of our brokers to donate through the Red Cross,” he said. “Haiti is a pretty corrupt country. They've got to be careful because there's going to be a lot of stealing and people being taken advantage of. It's best to go through the American Red Cross.” He suggested that clients or advisers turn to the Better Business Bureau to investigate charities. Laura Scharr-Bykowsky, a certified financial planner with Ascend Financial Planning LLC, is sending an e-mail to her clients today outlining guidelines, including potential red flags, when looking for a charitable organization. For example, Ms. Scharr-Bykowsky is reminding clients to get documentation of their contributions and keep copies for tax purposes. She's a member of the Garrett Network and is a fee-only adviser. Ms. Scharr-Bykowsky said she has also been telling clients to look closely at the organizations they're thinking of funding. She and her husband decided to donate to World Vision, a non-profit group that offers help to children in foreign countries. She has donated to this organization for several years by sponsoring a child. She called World Vision today and learned that it has doubled its staff to 800 since the earthquake, and is trying to help match children with relatives outside Haiti. “I know exactly where my money is going,” she said.

Latest News

Osaic CEO Jamie Price sees W-2 channel growing to a third of assets
Osaic CEO Jamie Price sees W-2 channel growing to a third of assets

Osaic's Empowered Independence reached roughly $20 billion in a year and a half as succession pressure pushes advisors toward becoming W-2 employees

TaxStatus, Nitrogen plug into Claude and ChatGPT in advisor AI push
TaxStatus, Nitrogen plug into Claude and ChatGPT in advisor AI push

New connectors bring IRS data. planning workflows, and meeting intelligence into AI assistants as RIAs make AI integration a top growth investment

Veteran Calif. advisor at center of $50M customer complaint sidesteps Morgan Stanley’s clawback
Veteran Calif. advisor at center of $50M customer complaint sidesteps Morgan Stanley’s clawback

Sam Su worked at UBS Financial Services in San Francisco from 2008 to 2023 before jumping to Morgan Stanley.

RIA moves: Beacon Pointe buys $905M firm, ASN lands Commonwealth team
RIA moves: Beacon Pointe buys $905M firm, ASN lands Commonwealth team

Wealthspire’s Ground Control is also expanding in London, adding a business manager focused on music and global touring

Investor alleges Arbor Realty Trust misled market on $1.25B loan mess
Investor alleges Arbor Realty Trust misled market on $1.25B loan mess

The REIT allegedly promised investors a fix while the problem grew by $200M.

SPONSORED Best Practices for Engaging Women Around Alternatives

Growing wealth, evolving priorities, and untapped opportunities are reshaping how women approach long-term investing.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.