I have a few risk management rules:

1. Where’s the guarantee? Eg, Investor Protection Fund, CDIC, etc.

2. Understand what you are invested in, ie, if you can’t understand the investment, you should not be invested in it.

3. Diversify, eg. one institution for RRSP, another for on-line trading.

John

By John Gan on Jul 13, 2009

On a french blog (www.majorblog.net) we can read a interesting point of view. Sometimes, the lawyers and the accountants tried to play the financial planner and suggested investments products to their clients. They are in the direct line of confidence and they abused it. In my opinion they are outlaws.

By simon on Jul 13, 2009

Larry/Simon,

The truth is that unless a sale is made, the “advisor”, does not get paid commissions or finders fee. To move away from churning the client’s account to make a living, “advisors” have began to charge a percentage for “asset under management”. Unfortuantely, I doubt that most clients have an explicit target for the “advisor” to benchmark and at the end of the day, the client pays the annual fee, but really is clueless to whether the advisor is adding value or just a closet indexer or worst yet, losing the client money.

With the proliferation of ETFs, it’s now becoming easier for investors to build a portfolio by paying for Portfolio/Financial Planning advice and implementing that advice with a discount broker for $10 or less per transaction. But this would require some displine and responsibility which many people neglect.

John

By John Gan on Jul 13, 2009

Pay close attention to the person that you are writing the cheque to….is the person or company somebody that you have researched and have confidence that they will not leave with your money. Who is the advisor registered with? Is he liscenced throught IROC or MFDA? Does he carry E&O insurance? There are two many investment firms that are only regulated by the securities comission. The securities commission does not provide much in the way of protection for the average client.

By Chris on Jul 14, 2009

As an independent registered financial security advisor I strive and work hard to build a solid and loyal client base based largely on referral where the element of trust becomes paramount. But, Equally Paramount is that trust should be earned and I expect it to be scrutinized, probed, and questioned and not blindly and carelessly given. When entrusting your money with an advisor or a financial institution you should be aware that you do so knowing that the element of risk will always be present regardless of the nature of the investment and its reputation or size. But, equally important you should be aware of the mechanisms that are in place to protect your money against that same risk, however small. Although opportunities abound everywhere, opportunists are equally lurking and ready to accept your hard earned money in exchange for higher returns nad regular payouts. Always be aware that there is a cost attached to those promised benefits and scrutinizing the legitimacy (it usually is) and nature of that cost is your right and will not only give you a clear indication of where and with whom your money is invested but will reassure you that the element of risk is properly and legitimately managed. One final note, always remember that when investing the responsability is shared and we must always do our due diligence with the proper authorities. Think of a bank and what they do before lending you their money.

By Tony Strati on Jul 18, 2009

Hello Larry,
A note on your last response, leaving the industry after committing fraud or any other breach of the code of ethics does not exempt you from any fines which may be imposed on you by the industry regulators. As for protection every registered or legitimate independent advisor must carry an error and omission insurance (as you also mentioned) but unfortunately it does not protect the client nor the advisor against fraud. IIROC’s Canadian Investor Protection Fund (CIPF) protects customers of investment dealers who are members of the IIROC. If you see “Member CIPF” on advertising literature, you will know that the distributor is an IIROC member and covered by this fund. Coverage is $1 million per customer account and protects investors against the insolvency of a member firm. On the other hand, limited protection is available to investors in the event of fraud. In Quebec, there is a fund that protects in case of fraud of a distributor of financial products. Currently Saskatchewan, Manitoba, and New Brunswick can order compensation of up to $100,000,(a drop in the bucket for those wo lost millions) but the order must be registered in court. Quebec can immediately compensate investors, in an amount of up to $200,000. Investors in other provinces do not have access to such investor protection. Larry, I’m not sure if you have made this information available to your readers, if you did I apologize for rehetorating but I find that although this information is available to everyone who seeks it, most of the individuals that are usually effected by these heartless and unscrupolous fraudsters are our elderly and I believe that most have neither the energy nor the resources to seek this kind of info. Lawyers and Notaries, although some are willing to do Pro Bono dont come cheap and most of those affected have lost everything to the point of not being able to pay their rent. I can only hope that some kind of justice will be served and that these hard lessons will create an urgent awareness, primarely with the individual investor and equally for our goverments to create more strict and efficient measures to prevent such senseless acts from reoccurring. Finally I would like to add that there are many good advisors out there who have earned your trust over the years and because of situations such as the ones we are experiencing today we see this trust being weighed and questioned. The face of the financial Services Industry is being transformed by such occurrences and I firmly believe that although it is difficult to be totally sheltered against fraud or opportunists and greed the lessons we learn will help us identify and ultimately avoid such disatreous situations from happening.
Thanks for your initiative in creating this forum Larry, and for giving me the opportunity to express myself.

P.S. Sorry for taking so much space.

By Tony Strati on Jul 19, 2009

“Don’t give all your assets to one advisor or company.”

I work for a big company that allows me to direct some of each paycheque to a Sun Life account, and Sun Life also holds my DC pension account. Is that “giving all my assets to one company”?

By Patrick on Jul 29, 2009

Is it not illegal for CEO’s to take shareholders money out of their companies to fund their own lifestyles? please see press

release: July 23, 2009) – Celtic Minerals Ltd. (TSX VENTURE: CME.V) (the “Corporation”) previously announced that Kevin Flaherty has resigned as Chief Executive Officer and as a director of the Corporation, effective June 30, 2009. This resignation was at the request of the special committee of the board of directors.

The Corporation announced the formation of the special committee on May 1, 2009. The special committee has determined that, on May 30, 2008, there was an unauthorized and unreported advance of $3,191,075 from the Corporation’s bank account to the former Chief Executive Officer of the Corporation (the “former CEO”). Working in cooperation with the former CEO, the special committee has obtained the return of those funds with the possible exception of approximately $50,000 and is seeking more information regarding certain additional transactions. It is possible that further review will disclose other unauthorized transactions in respect of which the former CEO has been queried. The special committee is also reviewing further steps to be taken in respect of the unauthorized advances. Securities regulators are also reviewing these matters and the Corporation is cooperating fully in that regard. As previously announced on May 1, 2009, there were inaccuracies in the two unaudited quarterly financial statements of the Corporation for June 30, 2008 and September 30, 2008. Those inaccuracies arise from the unauthorized transactions that have been discovered. The Corporation again cautions readers and shareholders that the previously filed financial statements for those quarters are not to be relied upon.

The Corporation also announces that, in the first quarter of 2009, it completed a private placement for an aggregate of 4,167,000 units (the “Units”) at a unit price of $0.10 (the “Offering”). Each Unit consisted of one common share in the capital of the Corporation (a “Common Share”) and one-half of one (1/2) warrant exercisable into an additional Common Share at a price of $0.15 per share and expiring two (2) years from the date of closing. The closing of the Offering occurred in four tranches on each of January 16, 2009, January 29, 2009, February 10, 2009 and March 12, 2009 respectively, for aggregate gross proceeds of $416,700. The Corporation announced its intention to complete the Offering on January 8, 2009, but did not make any announcement of the closing of the Offering at the time of closing.

Because the closings were conducted by the former CEO without consultation of corporate counsel, the Corporation is now undertaking a review of the closing documents related to this private placement. It has been determined that no filings were made under National Instrument 45-106. It also appears that a finder’s fee was paid to three registered dealers on at least a portion of the private placement, and finder’s warrants to acquire up to 163,940 common shares were also issued in connection with the placement. The Warrants are exercisable at $0.10 per share and expire two years from the closing. The Corporation is reviewing the subscriptions, finder’s warrants and other closing documents for completeness and accuracy prior to making any regulatory filings.

The Corporation continues to work to prepare its audited financial statements for the year ended December 31, 2008 and accompanying management discussion and analysis. The year end working papers have been completed and the Corporation’s auditors have commenced their work. The Corporation has utilized most of the funds that have been recovered from the unauthorized advances and from the private placement to pay trade creditors related to development work on its properties. Such work included exploration activities covering geological, geochemical and geophysical surveys on the Rambler, Buchans Junction, Kingurutik and Black Duck base metal exploration projects in Newfoundland and Labrador and the Muscocho Lake base metal exploration project in Quebec as well as diamond drilling on the Muscocho and Kingurutik projects. The Corporation currently has on hand approximately $350,000 in unallocated funds.

The board of directors of Celtic has commenced a search for a new Chief Executive Officer and Chief Financial Officer and is reviewing the composition of the board. The Corporation’s Calgary office has been relocated to #200, 604 – 1st Street SW, Calgary, Alberta T2P 1M7 and the Corporation’s records have been moved to that location under control of the special committee.

By Rico on Aug 4, 2009

Kevin Flaherty and Celtic and other Transactions??

Celtic Minerals Ltd. announced that Kevin Flaherty has resigned as Chief Executive Officer. This resignation was at the request of the special committee of the board of directors

Celtic is seeking more information regarding certain additional transactions. It is possible that further review will disclose other unauthorized transactions in respect of which the former CEO has been queried. The special committee is also reviewing further steps to be taken in respect of the unauthorized advances. Securities regulators are also reviewing these matters and the Corporation is cooperating fully in that regard.

By ty on Aug 13, 2009

More resignations after Celtic— Would this be required by the Commission??

Celtic Minerals announces that Kevin Flaherty has resigned as Chief Executive Officer. There was an unauthorized and unreported advance of $3,191,075 from the Corporation’s bank account to the former Chief Executive Officer, Kevin Flaherty Celtic Minerals Ltd. announced that Kevin Flaherty has resigned as Chief Executive Officer. This resignation was at the request of the special committee of the board of directors. :

1) Linear Gold Corp. (TSX: LRR.TO) (the “Company”) announces that Mr. Kevin Flaherty has resigned as a Director, effective August 11, 2009. Linear wishes to thank Mr. Flaherty for his dedicated service to the Company since July 2002.

2) Olympus Chairman and Chief Executive Officer, David Seton announces the resignation of Olympus director Mr. Kevin Flaherty.

3)Carpathian Gold wishes to announce that Mr. Kevin Flaherty has resigned from the Board of Directors effective August 11, 2009.

4) Courtland Capital Corp ANNOUNCES RESIGNATION OF DIRECTOR, KEVIN FLAHERTY

By Tom on Aug 16, 2009

Why did this money go from company’s bank accout to Kevin Flaherty?? Is this not theft?? Will Kevin Flaherty be charged?? Is this not illegal???

There was an unauthorized and unreported advance of $3,191,075 from the Corporation’s bank account to the former Chief Executive Officer, Kevin Flaherty Celtic Minerals Ltd. announced that Kevin Flaherty has resigned as Chief Executive Officer. This resignation was at the request of the special committee of the board of directors. :

By Mick on Aug 17, 2009

Kevin Flaherty resigns again??

Meritus Minerals director Flaherty resigns 2009-08-18 15:05 ET – News Release Mr. Terence Bates reports MERITUS MINERALS ANNOUNCES DIRECTOR RESIGNATION Kevin Flaherty has resigned as a director of Meritus Minerals Ltd. Meritus wishes to thank Mr. Flaherty for his contribution to the company during his tenure as director

By Sean on Aug 21, 2009

Kevin Flaherty? who is that Rico, sounds like a make believe buttercup friend…..reminds me of a poem by david jeffery.

By Napolean on Aug 21, 2009

What will happen to Celtic and Kevin Flaherty now? Will Celtic trade again? Will Celtic Minerals sue Kevin Flaherty? Will Investors sue Kevin?? Any ideas?

By Tom on Aug 24, 2009