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Showing posts from February, 2011

Paperwork that Could Clue You into a Scam

Today I read an article about a financial adviser whose husband, also a financial adviser, had been scamming his clients for over 20 years and she never knew! Of course, looking back she realized there were some red flags that should have alerted her to the situation.  These are the three things she observed:
Red Flag 1: His clients' portfolios enjoyed consistently good returns even when the market was performing poorly.(This is not impossible but very unlikely to occur). Red Flag 2: He did not provide his clients with detailed trade confirmations for buys or sells. Red Flag 3: He instructed his clients to make checks deposited to their accounts for investments payable to HIS firm rather than the custodian firm that actually held the investments. I will explain more about the roles of advisers, custodians and brokerage firms in future posts.
In an article on CBS MoneyWatch, she offers advice on what to do if you spot any of these red flags with your adviser. Click here to read the…