No one is safe from financial fraud. Investors all over the world fall victim to fraudsters who want to separate them from their hard-earned cash. Unfortunately, fraud happens at an alarming rate in the investment sector. Thankfully, there are ways that you, as an investor, can protect yourself from fraud.
David Milberg is an experienced credit analyst in NYC. He is a long-time owner of Milberg Factors, a factoring and finance company with locations in New York, California, and North Carolina.
1. April 5, 2017
Tips to Stay Protected From Financial
Fraud
No one is safe from financial fraud. Investors all over the world fall victim to fraudsters who
want to separate them from their hard-earned cash. Unfortunately, fraud happens at an alarming
rate in the investment sector. Thankfully, there are ways that you, as an investor, can protect
yourself from fraud.
Third-Party Custodian
Hire a third-party custodian. Your financial security may depend on it. If a financial advisor
suggests that you don’t need a third-party custodian, then you need to distance yourself from that
advisor. Keep in mind that hiring a third-party custodian doesn’t make you fool-proof against
fraud. However, it does provide some additional security.
Keep Up With Your Account Statements
2. You would be shocked to learn how many people don’t keep up with their financial account
statements on a regular basis. In the past, advisors have taken funds from clients by forging their
signatures. This type of fraud isn’t possible when people simply review their account statements
regularly.
Don’t Let Advisors Rush You
If a financial advisor says that you have to invest right away, you may want to be leery of the
investment. No investment is so urgent that you have to make a split-second decision. Only agree
to an investment after very careful planning. Fraudsters typically count on high-pressure
situations to get people to make bad investments. In general, high pressure usually means scam.
Invest in What You Know
One of the most common mistakes that people make is investing in industries that they don’t
fully understand. This opens you up to fraud because you have to be completely reliant on what
your financial advisor tells you to do. If you don’t understand a certain investment, don’t invest
in it. It seems simple, but many people all over the world don’t follow this guideline because
they’re told that they’re making a good investment.
Stay on Top of Your Money
Lastly, stay on top of where your money is and what it’s invested in. Many people simply give
their financial advisors large amounts of money and let them invest it wherever they see fit.
Although it’s great to have an advisor that you can trust, it’s better practice to know where your
money is.
Investing is an important part of building financial and family security. Using the tips discussed
above, you can protect your family from fraudsters while investing to build a nest egg. Even
though financial fraud can never completely be prevented, these tips can help reduce the chances
of it happening to you.
David Milberg is an experienced credit analyst in NYC. He is a long-time owner of Milberg
Factors, a factoring and finance company with locations in New York, California, and North
Carolina.