An SEC advisory admonishes investors to "conduct background checks" on prospective financial advisors. But critics say the agency doesn’t have sufficient control over the industry and might as well add: "because the commission won't be protecting you."

To illustrate the importance of vetting planners' marketing claims, the advisory cites the recent case of Michael George Thomas, formerly of Oil City, Pa., who claimed to be an advisor but was never registered anywhere. Authorities say he tried to sell a pooled investment vehicle to high-net-worth clients.

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