Seniors can be particularly susceptible to abuse. Many want to trust those that seem willing to provide assistance, and the proliferation of complex products can leave us all open to fraud by those exploiting both our trusting nature and that product complexity.
Even after the exposure of Bernie Madoff, I have seen or heard too many heart-wrenching stories of outright fraud, or financial products that were sold to an individual that simply didn't make sense, except to the dishonest person peddling their wares.
Never hesitate to reach out to us if you ever have any questions about our recommendations or why we believe they are best for your particular situation. Or for that matter, call us if you've come across something that sounds good but you just don't think you know enough about the product to ask the right questions. We are here to assist you in any way that we can.
10 ways to beef up your defensive line
Reviewed by the Federal Citizen Information Center and the U.S. General Services Administration, the Certified Financial Planner Board has put together this list of steps which you can implement immediately to alert you to potential fraud red flags and help protect you.
- Look beyond the designations on a business card.
There are over 170 known designations and certifications used by financial professionals. Some require rigorous testing, such as the CFP® or CFA designations. Others are little more than marketing tools, with no real education needed-much less an exam.
- If you don't understand what is being said, don't buy it.
This one is pretty simple, but we can still fall victim to promises that are really too good to be true. I strive to keep an open line of communications with you. Always feel free to pick up the phone and call me if you come across something that sounds good on the surface but leaves you with questions.
- There's no such thing as a free lunch - literally.
You may get a tasty meal, but be wary of the pressure to make an immediate buying decision. There's nothing wrong with sleeping on it or getting a second opinion. Be skeptical of anyone who tries to persuade you otherwise.
- Just because a so-called expert recommends it doesn't mean it's right for you.
I have repeatedly emphasized that your specific situation and circumstances dictate the best course. Think about it-an aggressive stock fund might be just what's needed for a 28-year-old who is saving for retirement. That same fund might not work for someone who is 90 years old and needs income. Which is why we don't use "cookie cutter" allocations or a fixed menu of investments for our clients.
- It's a tried and true axiom. If it sounds too good to be true, it's probably not legitimate or safe.
It's human nature to want to find the magic bullet that easily solves a problem. But be very wary of promises that seem too good to be true - they almost always are.
- Don't confuse familiarity with trust.
We know plenty of good people in our community, but please do your homework and check anyone out before entrusting your finances to them.
- Read anything you sign.
Make sure you read account applications or contracts before signing them.
- Make sure the money others are making isn't yours.
We've all heard of the classic Ponzi scheme. Be very careful that you don't throw your hard-earned money into a scam. Our business model, for example, has three pairs of eyes looking at your funds - ours, our independent broker/dealer (SFA), and our custodian (Pershing). Be wary of entities that manage, hold, AND report on your investments all by themselves.
- Get the full story.
What is the cost of the investment? Who will benefit from your decision? How is compensation determined, and paid?
- You have rights as a homeowner. Know them.
Know your rights as a homeowner. For example, if you are considering tapping home equity via a reverse mortgage, mortgage refinance, or home equity loan for investment purposes, let's talk and discuss any possible pitfalls.