Can we trust Wall Street now?

After everything the country’s financial system has been through its difficult to believe there is anyone trustworthy on Wall Street. Knowing the difference between sound advice and a scam is difficult, but some experts provided some helpful insight.

“Even before the challenges Wall Street has endured, there were good and bad firms,” said Kelly Damron, a certified public accountant and MBA.  “ But it seems the firms are better today, in general, because there is more oversight, collaboration and accountability.” While it’s nearly impossible for corruption to be detected by the public it’s also difficult for regular accountants to identify fraud.  There is actually a special certification for fraud examiners since they require such a different skill set from tradition accountants. Consumers can find out if the firm or advisor they are working with has had an audit done by a certified fraud examiner and the outcome of the audit.

Publically traded companies are less likely to commit fraud, Damron said, since they are under inspection by a number of consulting services. “Unfortunately, ethics is not a Firm issue, but an issue of those who are running the Firms,” Damron said.  In many cases word-of-mouth or media accounts are the only resources for the public in determining who to trust.

Kelly Campbell, author of Fire your Broker, a book about finding sound financial advice gave a few tips.

-Do research on any financial adviser: Background checks can be done to see if a broker has any infractions on his or her license. If there is not that much info on them that’s a good sign. “No news is good news.”

Check out these sites for backgrounds on brokers: FINRA.org and SEC.gov

-Ask to talk to current clients: They will point you toward their happiest clients for sure but be creative with your questions and you can still find out a lot.

-Look for earned experience: Did the person go to school? Did they spend the money and the time to get the designations respected in the industry? These can be signs that they are truly committed to the field and not just about making a quick million.

Be smart. Ask questions. Go forward and finance.

Elizabeth Ulion is a graduate student at Northwestern University. Finances confuse her.

Photo courtesy of srqpix/Flickr.