Check Credentials & Background. First off your broker should be a Certified Financial Planner™ (CFP) professional. You can verify the validity of his registration at www.cfp.net. Ask for reference checks for your protection. Background checks are completely acceptable and highly recommended when doing business with an investor. Verify their character and the way their operations are performed. You can always check up on your investment manager, requesting a Financial Industry Regulatory Authority’s (FINRA) Broker Check network, available online.

Seek Outside Resources. Several illegal investments are operated in their own broker-dealer firm so their clients’ investments and money remains solely in their hands. Reach out to other financial firms like a custodian who can help allay any concerns where the outside party can become responsible for key back-office operations, including execution and settlement of trades. Another valuable use of a custodian is the verification they hold on asset levels and returns.

Protect Your Nest. Brokers who want your money to remain with them for a while and advise you sit back to watch the opportunities roll in, might be sitting back and enjoying your money more than your investment. Always question where your money is and request written updates on the progress of your investment.

Appearance Means Nothing. Con artists appear just as qualified as true investment advisors, so take appearance off the list when narrowing down a good broker to trust. The individual may look successful in their nice clothes and Lexus, but that success might come from being a scam artist, not a broker. Do your homework; research their credentials to determine if their rich appearance is truly being generated from successful investments.

When in Doubt, Get Out. If you’re confident in the opportunity then be confident in the one handling your money. If you feel doubts in the advice or techniques of your broker, especially when they’re advising you hold off on pulling out profits or principal or wanting to “roll-over” non-existent profits into new and more alluring investments, then get out. There will be someone else who is open to your ideas and investment opportunities and more trusting to handle your money.

Just Say No. Just because the salesperson is making validating points, doesn’t mean they are true facts or real deals. You can always say no, especially if the salesperson is demanding a signature or money upfront. Request time to look things over and ask for their firm’s information to confirm the investment opportunity is registered with the Securities Division.

Pay the Firm, Not Your Advisor. Never write out a check or send cash directly to your advisor. Your payments should always be to the firm or fund of your investment.

As we stated earlier there are scam artists out there waiting for the right prey to attack, but with the help of these tips to avoid investment scams you will be able to steer away those con artists and invest your money in the right hands.

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