Avoiding Investment Fraud: What You Really Should Be Asking Your Financial Advisor

Most of us know that investment fraud and Ponzi schemes are always a risk if you're not careful where you put your money, but how many investors are actually taking the extra step and checking up on their brokers? A recent article from dailycaller.com considers this and offers some excellent advice for investors who are searching for or already working with a financial advisor or other investment professional. That advice is, essentially, to worry less about being polite, and go ahead and ask your financial advisor the awkward questions about what happens with your money when you invest. As investment fraud attorneys who have seen these types of cases over and over again, we absolutely concur.

As far as what constitutes “awkward questions,” the article recommends questions such as:

• "What is your investment strategy?" Ask your investment advisor about his or her strategy. If it sounds too complicated, or if your advisor cannot explain it in language you understand (relying instead on flashy technical jargon), then beware.
• "Do you work with people like me?" Ask about your advisor’s target clients, and decide if you are you of a similar age, income, and financial situation. For example, if you are concerned about saving for college for your kids and paying off the mortgage, then you might not be a good match with an advisor who caters mostly to clients interested in high-risk/high-return opportunities.
• "What's the worst-case scenario?" Although you hear a lot about what happens if everything goes right, don’t be afraid to ask about the losses, fees, and risks associated with the investment. You have a right to that information, and it is an integral part of making informed investment decisions.

Additionally, investors are encouraged to get to know the personality of any investment professional you plan to work with, so that you have a clearer idea of how you get along, and if your values, when it comes to investing, are similar.

Ultimately, protecting yourself from investment fraud and stockbroker misconduct means taking a little extra time to research the advisor, the firm, and the investment itself. Additionally, investors should trust their "gut" instincts; in other words, if an investment gives you a bad feeling or seems too good to be true, that should be a big sign that you need more information before you can make an informed decision safely.

If you have already lost money to an unscrupulous financial advisor or other financial fraud, the investment fraud attorneys with the Law Firm of Meyer Wilson are here to help. We represent investors nationwide in stockbroker mediation, arbitration, and litigation, and we have a track record of success for our clients. Speak with us today at 1-866-8-BROKER (1-866-827-6537) for a free case evaluation. We also encourage you to request your FREE copy of David P. Meyer's must-read book Five Signs of Investment Fraud...And What to Do if it's Happened to You.