Tips To Protect Yourself From Financial Scums Of The World
Wednesday, June 12, 2013, 1:00 AM | Leave Comment
The scums and the schmucks of the financial world dealing with your finances are increasingly on the rise. You cannot completely, 100%, protect yourself from them. But, in real life, like anything else, you just have to try to somehow beat the scums at their own game. In a handful of states, there are laws against that. In those states, broker-dealers have what is commonly known as fiduciary duty. California is one such state.
Fiduciary duty is almost non-existent in most states
In the rest of the majority of states, federally registered investment advisers are fiduciaries, but broker-dealers are not. That in itself creates a double standard. On top of that, many investment professionals wear both hats – as federally registered investment advisers and as broker-dealers.
This must leave you wonder “Why is my trusted adviser not worth trusting?” You can take steps to ensure your financial adviser is trustworthy. A coalition of groups representing financial and investment advisers would like a fiduciary duty to apply anytime any financial professional gives advice. Congress is looking into that and is considering a uniform standard.
What can you do to protect yourself in the meantime?
Investment peddlers, scums and the schmucks often use high-pressure tactics on the vulnerable folks – those who are younger and those who are our elders. They start talking as if they own the world, let alone Wall Street. They may start with a pitch at a free lunch seminar. You probably have gone to one. I know I have.
To avoid investing in something that is not kosher and is inappropriate for you and you smell a rat, here is what you can do:
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Please, please, please. Be patient
Don’t hurry into things that you might regret later. The world is not going to end if you don’t hurry. What I am saying is, no matter what happens, no matter how many people you see sign up – some of them might be the guru’s own people – don’t get pressured into signing any documents without taking the time to think about the investment.
Always get a second opinion from a trusted friend, adviser, or lawyer just like you would if one doctor advised you to have an operation. Come to think of it, there is not a whole lot of difference. In one case, you go under a physical knife, in another you go under a financial knife. Think about which is worse.
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Be always informed about investment
If you have not done your homework, stop and educate yourself. There are legitimate websites that can help you, especially the ones that have dot gov in it. Once you are up to speed, consider hiring a certified financial planner who is bound by a code of ethics to guide you objectively. Once you get the genuine advice, purchase any recommended investment elsewhere.
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Get more information
The Financial Industry Regulatory Authority (FINRA) has a list of questions on their website you should always ask before you take the step of investing.
In a Nutshell
Don’t get pressured even though you would be tempted to go for investment at the very instance someone tells you to do so. Just be extra careful. Many folks have been stung and suffocated financially by the scums and the anacondas of the financial world.
