Firstly, let me say that all of the Financial Advisors that I know are extremely ethical.  However the recent Earl Jones and Bernie Madoff tragedies in the news have highlighted where clients have placed too much trust in their investment advisor. Doing your own taxes or having them completed by a third party, gives you a chance to examine your statements to ensure your instructions are being followed, your statements are bona fide and activity is normal.

Depending on your objectives, your investment strategy may be very conservative or aggressive.  Conservative investors should look for more fixed income investments and dividend paying blue chip stocks.  More aggressive strategies may be more heavily weighted by industry sector and skewed to equities. Take a moment when you receive your statements to ensure they were sent by the custodian or mutual fund companies.  Look at the envelopes they were received in, look for letterhead and other clues that the documents are genuine.  Too many people do not look at their statements.  In the Madoff and Jones cases they placed their faith and future entirely in the hands of their advisor.

A professional accountant is up to date on their tax legislation (we have mandatory training), has completed a university-level tax program, has experience working with clients like you and can identify problems early. Most accountants will catch a doctored statement or spreadsheet.  Real statements have tonnes of disclosure, the right letterhead and come straight from the custodian.

Your accountant can help you understand most tax planning strategies.  If someone says only your financial advisor can understand and report – watch out.

“If it seems too good to be true, it probably is.”