Make Sure Your Adviser Is Legit

How can I find out if my financial adviser has a license to sellinsurance?

You can check on the status of an adviser's insurance license through the state insurance department, which can help you avoid unlicensed agents as well as scam artists and salespeople with a troubled past.

You can find contact information for your state insurance department at the insurance page of our Web site. When you call, ask about the agent's licensing status as well as disciplinary history. Also, if you're receiving a questionable pitch for a product, run it by the insurance department's consumer services department, which can tell you if it's a common scam.

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If an adviser is selling you investments, also check his or her record with the Financial Industry Regulatory Authority's BrokerCheck tool, which includes professional background information for 660,000 brokers and 5,100 securities firms that are currently registered, as well as thousands of brokers and firms that had been registered in the past.

Also check out the person with your state securities regulator, who can let you know if the broker and product being pitched is licensed. These regulators are also aware of common problems in your area. Go to the North American Securities Administrators Association Web site for links to state regulators.

And do a quick search if the person claims to be a Certified Financial Planner. Use the CFP database to verify whether the person holds the CFP designation, and find out if the CFP board has taken any disciplinary action against the person. CFPs must meet rigorous education, testing and ethics requirements to maintain the designation.

Doing this research isn't foolproof. It won't help you avoid scam artists before the first time they're caught. But it can help you avoid someone with a troubled past. It also helps to be aware of the types of scams out there and to ask questions about pitches you don't understand. Be particularly suspicious of advisers who try to rush you into making a decision.

For more information about common problems and how to avoid them, see Protect Your Retirement From These Investment Scams, which focuses on Ponzi schemes, unsuitable annuities and overhyped investment returns; How to Spot a Health Scam, which describes Medicare Advantage sales abuses; and Taking Aim at Military Scams, which explains how military families can protect themselves against unsuitable insurance, high-fee investments and affinity fraud.

Also see the NASAA's Senior Investor Resource Center, the SEC's Office of Investor Education and Advocacy, and FINRA's SaveandInvest.org.

For more information about finding a financial adviser, see In Search of Good Advice.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.