|
|
How to avoid scam by investment manager January 6, 2009 In the wake of Madoff hedge fund scam, the SEC will reassure the market that the commission’s enforcers will do a better job next time. But investors would be better off helping themselves.
While most investment managers are honest, your investment manager could be another Bernard Madoff who masterminds the biggest Ponzi scheme in history. To prevent you from investment scam ran by your investment manager or financial planner, the following are some advices for picking the investment professional.
Avoid managers who are unknown, or unregulated, or come without good referrals, or haven't been in the industry long.
Know where your money is held, where it is invested, and how much you've got. If your adviser manages your investments, the funds have to be held separately in custody at a big broker-dealer firm regulated by the Financial Industry Regulatory Authority (FINRA) and backed by the Securities Investor Protection Corporation (SIPC). You can contact that firm directly to make sure it has your money, and you can check it out through FINRA. Get copies of your statements directly from the broker.
Related articles: |
|