In this slow moving economy, countless retirees have watched their nest eggs shrink. Many have become fearful that they won’t have enough money to live out their retirement years. Some are worried that they won’t have anything to pass on to their heirs. It is these very concerns that put older investors at risk of investment fraud. Yet, criminal scams aren’t the only threat to investors.
There are several other issues that retirees face. According to an article by The Associated Press, “Protecting Elderly Parents From Financial Catastrophe,” in addition to Ponzi schemes and other types of investment fraud, inappropriate investments are also a problem for senior investors.
These inappropriate investments can create many complications for investors:
- Money may be tied up for prolonged periods of time
- Investments may be high risk
- Investments might not match the investors’ financial goals
As an investor, there are some tactics you can take to reduce your risk of financial loss:
- Know the types of investments you currently have
- Organize your paperwork
- Ensure you are receiving regular account statements
- Use FINRA’s BrokerCheck to research your broker
With all that being said, it is important not to minimize the serious risk of investment fraud. According to The Associated Press, there have been at least a dozen cases in recent weeks in which advisors supposedly stole money from investors. These alleged cases of fraud involved $416 million and occurred in as many as 22 states.