Friday, July 14, 2006

Two views of accountants as investment advisers

Judging by a survey cited in our recent post, men and women with $500,000 or more to invest are three times as likely to use an accountant as primary investment adviser than they are to use a trust officer or private banker.

Brokers still get the biggest share of the advisory business, 31% compared with 9% for accountants and 3% for trust officers and private bankers. Still, the growing role of accountants in asset management is notable.

Coincidentally, the case of one accountant who managed investments on the side was featured on NPR's Morning Edition this week. You can hear the item, one of a series on the scamming of senior citizens, here.

According to the U.S. attorney who handled the case, "Barry Korcan engaged in a decade-long fraud scheme, in which he stole more than $11 million from investors and retirees. He used his position as an accountant to gain his clients' trust and their savings, then destroyed both in order to support his businesses and extravagant lifestyle. His despicable scheme is one of the largest frauds ever perpetrated and prosecuted in Western Pennsylvania."

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