In light of the recent Bernard Madoff scandal and the slow economy, some investors are taking a closer look at who is handling their money.
"Our business is hard enough the way it is," said Chuck Sjostrom, an account representative with First International Investments in Fargo. "Something like this comes up, and (investors) look at who they can trust."
New York investment adviser Madoff was sentenced Monday to serve 150 years in prison for swindling billions of dollars from dozens of individual investors and charities.
Local financial advisers are seeing clients become more educated on where their money is going following the scandal, but said the investment business remains strong.
"I would guess that people will just tend to be more cautious as a result of Madoff, and that's good. It's important for people to be prudent with their decisions," said Keith Burck of Alerus Securities in Fargo.
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Ross Almlie, president of RDA Financial Advisors in West Fargo, said the Madoff scheme will teach investors to expect more transparency in the industry.
"I'm a firm believer in complete transparency," Almlie said. "If a customer isn't seeing exactly what we're seeing on our side, then they should question their adviser. If they don't have that arrangement, then they have to start asking questions."
Investors should read statements sent by their advisers as well as a third-party custodian that confirms and provides details of a transaction, Almlie said.
Brad Gorder started investing with RDA Financial about five years ago because he trusted Almlie's investing philosophy.
"I think he chose what was best for me, not what was best for him," Gorder said.
Gorder bases his financial decisions on the advice Almlie gives but only after further researching the investments on his own.
Gorder said that there's no definite answer to preventing what happened in the Madoff scheme, but investors should rely on intuition and regulatory agencies to guide them.
"You need to trust your instincts, and you need to trust the people looking out for you."
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Readers can reach Forum reporter Heidi Shaffer at (701) 235-7711
