Informed Investors Avoid FraudStuart Kirk, CIM®, Senior Wealth Advisor
Every now and then we read about an unscrupulous so-called investment advisor who has managed to fleece some innocent unsuspecting investors. Most of these cases look and feel the same. Normally guaranteed returns are offered well above markets rates, and the investments are normally deposited into corporations that no one has ever heard of. There is good news and bad news here. The bad news is that the industry and regulators can only do so much to prevent these occurrences. The good news is that you, as an investor, can avoid being taken by sharks.
There is a certain amount of personal accountability that is involved in these transactions on behalf of the investor. Here are some tips to make sure your money does not end up somewhere in the Caribbean:
Work with a Qualified Investment Advisor
Don’t Let Greed Cloud your JudgmentMake sure the advisor you work with is registered and licensed. For securities you can look them up online with the BC Securities Commission. Additionally there is a Canadian Securities Administrators disciplined persons list and for insurance, go online to the Insurance Council of BC.
If a promise of above market return sounds too good, then it probably is. There are very few investments that have a guaranteed return, GICs is one of them.
Make Cheques Payable to the Correct Institutions
Always make cheques payable to the institution you are investing with, and never to the advisor directly. Do not make cheques payable to corporate names that you are not familiar with.
Be wary of cold calls, internet promotions, investment ads and investment seminars hosted by companies or people you don’t know.
Identify a Scam Artist
Scam artists look like you and me. They often look professional. Sometimes they have impressive offices and addresses, so you will think they are legitimate professionals. They can be very intelligent. They know how to be extremely sociable and charming. If you catch them in a lie, they will make up another lie so quickly that you will seldom, if ever, notice.
Remember the more knowledge you have, the better questions you will ask. You are also less likely to be conned by someone who uses terms they think you might not understand. Always come to us for a second opinion if you are unsure or feel uncomfortable with a proposal that is being made to you.