The Fraud College is a Utah organization that educates members of the LDS church about affinity fraud and other types of investment scams. Affinity fraud occurs when a scam is sold to a group of people who have a common interest or belong to the same organization (LDS church). For example, Bernie Madoff used country clubs and synagogues to market his Ponzi scheme.
The close-knit Mormon community has long been a target of scam artists. Scam operators make sure a few high visibility Mormon investors have a positive financial experience. Then they use them as references to increase their credibility. This strategy has been very successful because Mormons trust other Mormons, in particular high visibility Mormons.
Don’t buy an investment product just because someone you know or respect has also bought the product. You still have to do your homework!
Religious organizations tend to attract con artists. By claiming membership to a particular religion, the scam artist uses affinity fraud to swindle his victim. The victims are faithful church-goers in search of a safe haven to invest their hard-earned savings, and they tend to be very trusting of their fellow members. In fact, many financial advisors, good or bad, use their religious affiliation as a way to gain an investors trust. Many advisors will state on their bios that they are part of a group such as a christian financial advisors network (or some such thing) as if their God would care anything about a financial advisors network. The bottom line is not to trust someone just because he or she claims to be a member of your group.
I would also add that there is no substitute for doing your due diligence and making sure the advisor is registered, has the least amount of conflicts of interest,and has an investor friendly business model.