6 Ways to Avoid Financial Advisor Frauds and Scams
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There have been many stories over the past few years regarding financial advisors who scammed their clients. If you feel as though you were a victim, you may want to contact an Investment Fraud Attorney Los Angeles, as they are able to take on these cases to help you win back some of the money you lost. And if you are confused about whether or not you are being scammed, take a look at the six ways to avoid financial advisor scams.
- Watch Investments
Even if you have complete trust in your financial advisor, you should always take a look at the investments they are making. Make sure they provide you with some type of access to your portfolio so you can see the trades and transactions as they are being made.
- High Investment Returns
It is one thing to have a really good couple of quarters, but if you are seeing unusually high returns for many years in a row, when the market is not doing as well, you may want to question how those returns are coming about. It is not enough for them to show you a few graphs where the lines are going up to indicate profits. Ask to see proper details about where they are investing your money, and how they are consistently getting you returns that are far better than the market average.
- Not Letting You Withdraw
There are some investment scams where they will continue to show you really good returns, but they will baulk at the idea of you withdrawing a huge chunk of the money you have in the account. If they are doing such a good job, why do they care if you take out your money?
- Charitable Donations
If your financial advisor is always pitching various charities or organizations as a way for you to donate to a good cause and get a tax break, you may want to check up on those charities before you put any money into them.
- Avoids Telling the Whole Story
It is understandable that your financial advisor knows more details about the market than you. But if you have an advisor who flat out refuses to explain how they are investing your money, or how they are getting you certain returns, it is not a particularly promising sign. A lack of transparency is always an indication of a possible scam.
- Not Taking Your Calls
If you are desperately trying to get in touch with your advisor because you want them to make a particular trade, or you want all your money out of the account as soon as possible, you should expect a response. In fact, really good financial advisors are always available on the phone or through email. If you do not get a response for 24 straight hours, it means you are probably being scammed. It is one thing for an individual to not get back to you, but if no one from the firm returns your calls there is definitely something going on.