The Importance of a Good Financial Advisor
A sad case in British Columbia has shed light on why it is so important to make sure you h ave a licensed and qualified financial adviser working for you. Especially when you’re handing over hundreds of thousands of dollars to invest.
Helen Dubas and her husband, an older couple, were looking to invest some money in order to secure their future. They met up with David Michaels, an investment adviser in the province who told them that he could make the right investments for them, and that all they had to do was take out a loan on their home. It was guaranteed, he said. Even if the investment went bad, they’d get their money back.
“David advised that it would be a really good deal,” says Helen. “I took a line of credit against my house for that $100,000, and that’s $100,000 that I’m not going to be able to pay off in my lifetime,” said Helen.
“He gave me brochures that said guaranteed. That even if the thing went down I’d be guaranteed to get my money back, which of course wasn’t true at all.”
No, it wasn’t true. Now, Mr. Dubas has passed away, and Helen Dubas just wants her money back. Unfortunately, if she wants it, she’s going to have to fight pretty hard for it.
As it turns out, David Michaels hasn’t been registered as a financial adviser within the province since 2006. It was at that time that he resigned due to the fact that he was facing disciplinary action from the Investment Dealers Association. However, losing his registration did little to deter David from making millions. He continued on to sell $65 million worth of investments to the Dubas’ and to another 484 investors between 2007 and 2010.
Michaels was able to do it because he used an infomercial on a Victoria, B.C. network where he claimed to be “one of the top financial advisers in Canada.” Investors easily bought into it because he told them that he was putting their money into super safe and secure investments – a private senior’s home was one of them, and an oil company was another. He was also very likable and seemed to know a lot about different investments.
“My husband had real faith in David because he really sold us on the fact that we were getting a good deal with him,” says Helen. “He would be so disappointed with…he’s passed away, but he would have been so disappointed in David.”
And so are the other investors. Since 2007, Michaels has taken $65 million from investors, money which is now all gone. The British Columbia Securities Commission has said that the investigation is on-going, and that a public hearing will be held in about six months. However, no criminal charges have been laid at this time.