Is Your Financial Advisor a Crook?

"NAPFA has always held its members to the highest standards in the profession," said a NAPFA statement. "That doesn't mean we are perfect. Like every profession there may be individuals who choose to violate the trust of clients they serve and are subject to prosecution by the regulatory authorities. This occurs in law and medicine."

Normally, investors' first line of defense against theft by a financial advisor is to make sure their assets are held in accounts with an independent, third-party custodian. With Weitzman and Jarvis, client assets were kept at Charles Schwab and T.D. Ameritrade, respected firms that cater to independent advisors.

With Weitzman, it was Charles Schwab that first raised questions about a "potentially unauthorized withdrawal," according to a statement issued by Weitzman's firm, AFW Wealth Advisors.

"AFW views these potentially unauthorized transactions as isolated acts of Mr. Weitzman. Mr. Weitzman's connections to AFW accounts and AFW's daily operations have been completely severed. AFW does not anticipate that Mr. Weitzman will be returning to AFW in any capacity," the company said in a statement.

Normally, an advisor would have authority to carry out trades on behalf of a client, selling Fund A and buying Fund B. But he or she would not be able to withdraw funds from a client's account -- unless forgery is involved.

In theory, such forgery could be committed by anyone. In reality, it is easier for a crooked financial advisor to pull off because he or she is familiar with the necessary forms and has access to the needed information.

Ultimately, an investor's best defense against a crook is vigilance. Pay attention, check your accounts online, study your statements and maintain a healthy skepticism -- even if you're dealing with me.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at

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