Where and how to invest your money requires careful consideration. Planning for a well-provisioned life and retirement is no mean feat. That’s why the person you choose to help you invest your hard-earned income must, first and foremost, be a trustworthy individual. They must also have the knowledge to handle your funds responsibly.
But what if troubling circumstances arise? How do you know if you should be concerned about the broker or advisor you’ve chosen? Here is a helpful list of red flags to watch out for. Should any of these situations occur, consider moving your funds immediately and reach out to a lawyer to safeguard your future.
- If the broker or advisor makes guarantees, be concerned. All investments are somewhat unpredictable. No one can say exactly how an investment will perform.
- If the broker is pitching unregistered or unrecognizable products, be wary. This may indicate a scam is taking place, and the product is not real.
- If your returns are too good to be true, be worried they are. If you are getting returns that are consistently the same or increasingly good, this is unlikely. You should investigate. Markets naturally fluctuate; this is the way of the world. Be suspicious of this consistency.
- If the broker credits their own complex strategies to their success, be skeptical. If they can’t clearly explain what they are doing, it’s probably not legal.
- If any documentation is missing, be alarmed. A good businessperson keeps accurate records, especially if their business is finance. Demand to see the missing records. If they can’t provide them, take your business elsewhere.
- If there are discrepancies in your account, be cautious. Your money is being handled by either a careless or dishonest individual.
- If the broker or advisor is overly pushy about sales, be on your guard. They will likely continue to place selling you things over your best interests throughout your relationship.
Take care with your money and build the right kind of relationship with a trusted broker. Also, remain vigilant throughout your working relationship as life circumstances can change an individual’s values over time.
Red flags should be a warning. Don’t let the situation proceed to the stage of a life lesson.