On April 1st, the Financial Industry Regulatory Authority released an investor alert
“to help investors avoid getting fooled.” These tips provide
ways to spot potential misconduct and fraud so you can protect your finances.
At Meyer Wilson, we want to make sure all investors are aware of the potential
dangers of investing and understand the various ways to avoid fraud.
1. Know Your Broker
It is extremely important to do your research before making an investment
with a broker or firm. You must build a relationship on trust when it
comes to someone handling your finances. Before you choose a broker, check
to make sure they are registered. You can also check to see if there are
any disciplinary actions against the broker or any complaints. You can
BrokerCheck to learn about any violations the broker may have made.
2. Know What Type of Investment You’re Making
There are various investment products and strategies and some will fit
your portfolio more than others. For instance, depending on the amount
of money you are investing, you may want to take a safer route and invest
in low-risk investments. Broker’s often make recommendations regarding
where they feel you should be investing. Sometimes, though, these recommendations
are unsuitable for your portfolio and they may be trying to collect more
money from commissions and fees.
3. Know When to Ask Questions
Keep in mind, it’s your money; you have the right to ask questions.
Speak with your broker about what type of investments best suit your goals,
objectives, risk tolerance, and financial situation. Don’t be afraid
to ask questions or appear uninformed, and if you can’t get satisfactory
answers to your questions, then don’t agree to purchase the investment.
4. Know How You and Your Advisor Should Work Together
Again, this kind of relationship should be built on trust. When working
with your advisor, you should be able to trust that they have your best
interests in mind. Keep the communication open so you can ask questions
or express concerns. This allows you to bring up any issues if you notice
discrepancies in your account as well.
5. Know the Signs of Fraud
Above all else, it is important to know what fraud can look like. Keep
an eye open for guarantees, unregistered products, overly consistent returns,
complex strategies, missing documentation, and account discrepancies.
. Financial advisors guaranteeing certain returns or selling unregistered
products may be misrepresenting investments. Always exercise healthy skepticism
when considering any investment that’s being sold to you.
If you’ve lost money because of broker misconduct, contact our securities
fraud lawyers for a
free consultation. We may be able to help you recover your losses.