By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@paladinregistry.com
Site: http://paladinregistry.com
About: Jack writes for the InvestorWatchdog website and Worth magazine. He worked in the financial services industry from 1976 to 2004. For twenty of those years he was the president of a Registered Investment Advisory firm and a Broker/Dealer. Jack is the author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor and is a co-founder of PaladinRegistry.com.See Authors Posts (87) | November 7, 2009 | Bad Products & Services, Deceptive Sales Practices, Illegal Schemes & Scams

In a fictitious scenario you attended a retirement planning seminar and met a person who reeked of respectability in his pinstripe suit, button down shirt, and wingtips. He was one of the most likeable people you had ever met and he immediately began asking you questions about your personal financial situation and your goals. You interpreted the questions as him taking a real interest in you and your needs.

Once the advisor developed an initial relationship he showed you a brochure and prospectus that described a “once in a lifetime” investment opportunity. This product would help you retire when you want to and live the way you want to. That’s because its unique, sophisticated investment strategy is capable of producing exceptionally high returns for no risk. You had immediate interest because this was exactly what you needed to achieve your financial goals.

This scenario didn’t happen to you, but it has happened to hundreds of thousands of investors who have lost billions of dollars by investing in financial scams. Based on the facts in our scenario, I have two questions for you. First, how did you know the person was a real advisor? Anyone can buy a pinstripe suit and print fake business cards. They can even use the names of real advisors and companies. Also, how did you know the product was real and not an investment scam? Like business cards, it is easy to use a real prospectus to create a fake one.

Following are five valuable tips that will help you protect your assets from fakes advisors and products:

1. Ask the advisor for his CRD (Central Registry Depository) number and use it check his compliance record at www.FINRA.org. All properly licensed sales representatives have CRD numbers.
2. Check the advisor’s licensing and compliance history with your state’s Securities Commissioner.
3. Visit the advisor’s office before you make an investment decision. It is easy to print fake business cards. It is more difficult to fake an entire office.
4. Contact FINRA and your state’s Securities Commissioner to check the registrations of all investment products that are recommended to you.
5. Never make a check out to the advisor or the advisor’s company unless it is a major brand name company. Make your check out to a legitimate, major custodian such as Schwab, Fidelity, Pershing, or TD Ameritrade.

Do not assume! And, do not let yourself be overwhelmed by the advisors’ personalities and sales skills. It ALWAYS pays to check the information you receive from financial advisors BEFORE you invest your assets.

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