Saving enough money for retirement is challenging enough. Unfortunately, senior investors now need to worry about trusting financial advisors and investment promoters in order to avoid losing their hard earned savings. There are steps and precautions seniors can take to help guard their investments.
First, fraudsters tend to target people who they can easily build a relationship of trust with. Thus, common frauds include affinity fraud through community groups, clubs, associations, and religious places of worship. Older people are also generally more trusting than the average person. The elderly are also more available to answer phone calls during the day.
Investors should always proceed with caution. Be wary of limited time offers or investments that you need to make a quick decision on. Also ask about the cost or commission for investing. If the commission is 10% that means that only 90% of your money will go to work for you and there may be considerable risks that need to be taken in order for the investment to earn a profit. Common frauds and scams also purport to offer a high rate of return or income rate.
Another common tactic is offering investors free-lunch seminars. The Financial Industry Regulatory Authority (FINRA) issued a Alert warning that in many cases free-meal investment seminars are not solely about education. The ultimate goal of these seminars are to recruit new customers to sell products to. While the meal and the sales pitch can be easy to swallow, the consequences of making an investment could end up being hard to bear.
FINRA found through a survey that four out of five investors age 60 and above received at least one invitation to a free investment seminar in the past three years. In addition, nearly 25 percent of all those investors said that they attended at least one of those seminar in the past three years. While not all free-lunch seminars a predatory, FINRA and the U.S. Securities and Exchange Commission conducted more than 100 examinations of free-meal seminars and in half the cases, the sales materials could be have been considered exaggerated, misleading, or otherwise unwarranted claims.
Our practice focuses on investor protection and seeking avenues of redress for investment losses due to fraud, misleading advice, and unsuitable investments. Our consultations are free of charge and the firm is only compensated if you recover.