Even though the neighborhood next door is perfect for trick-or-treating —houses close together, kids running everywhere —this was the first year none of our kids wanted to go. No costumes. No candy. Just memories of years past. They’ve grown up too fast, and it hit me harder than I expected.
We’re putting vinyl flooring in our renovated basement — which is actually a garage, but I’m from Pittsburgh, and all I’ve ever wanted was a Florida basement.
I swear there are 400 shades of brown vinyl. "Weathered oak," "rustic pine," "driftwood taupe" — they all look exactly the same! At this point, we could close our eyes, spin around, and point. Whatever color we land on, that’s the floor.
Today I walked into the bedroom to ask my wife for advice about something. Before she could answer, my phone spoke up and gave me the answer instead. I’m not sure whether to laugh, be impressed, or start worrying about what this world’s coming to.
These two partners in crime didn't flee the crime scene very well.
It’s a tough question, but plenty of my brave clients have asked it over the years:
"Dave, how do we know you’re not Bernie Madoff?"
Fair question. You’ve heard enough horror stories about financial advisors turning out to be crooks. The thought that someone could just run off with your life savings is absolutely terrifying.
So let’s talk about how this all actually works.
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The Rules and Watchdogs
The investment world is very regulated, though I’ll admit, it can look confusing from the outside.
Three main organizations keep an eye on me:
1.The SEC (Securities and Exchange Commission)
2.FINRA (Financial Industry Regulatory Authority)
3.The Florida Department of Financial Services
When I’m working as a fiduciary (which I always am), I’m supervised by the SEC.
Back in the day, when I used to do commission-based brokerage work, that fell under FINRA’s supervision.
So yes, there’s a lot of oversight in this business — and that’s a good thing.
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Who Actually Holds Your Money
When you invest with me, your money isn’t sitting in some Kennon Financial vault. It’s held safely at Charles Schwab, one of the largest, most trusted financial institutions in the country.
That means I don’t have your money, Schwab does.
They issue your statements, they provide your online access, and if you ever want to double-check anything, you can pick up the phone and call Schwab directly.
There are layer upon layer of checks and balances built into the system. I can’t move or touch your funds without your approval. Everything goes through Schwab, and the SEC and FINRA both keep tabs on the process.
If I ever had a lien, bankruptcy, complaint, or even a speeding ticket that crossed a certain line, I’d have to report it. The idea is full transparency, always.
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How Bernie Pulled It Off
So how did Bernie Madoff manage to fool so many people for so long?
Honestly, it wasn’t some complicated scheme. He was just the advisor and the "bank." People made checks out directly to Bernard L. Madoff Investment Securities.
There was no independent custodian like Schwab keeping records. So when clients called asking how their money was doing, Bernie’s firm just made up fake statements showing great returns.
In reality, the money was sitting in his personal account, earning basically nothing. He’d use new investor money to pay "returns" to older investors — a classic Ponzi scheme.
When the 2008 crash hit and too many people asked for withdrawals, the illusion fell apart overnight.
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Where the Term Came From
The word Ponzi scheme actually goes back to a guy named Charles Ponzi in the 1920s. He promised investors huge profits from trading international postal coupons, but instead of investing, he just paid old investors with new investors’ money.
Sound familiar? When the whole thing collapsed, his name became forever tied to that kind of fraud.
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So, the big difference between me and Bernie Madoff?
You don’t send money to me.
You send money to Charles Schwab, a publicly traded company with over seven trillion dollars in client assets.
Schwab holds your money. The SEC watches me. And you can always call Schwab directly if you ever want to double-check anything.
That’s how real transparency works.
Be Blessed,
Dave