It probably is! Here's a tragic story from British Columbia
about a senior woman who lost $100,000 because of a fraudulent investment
advisor:
To sum it up, she trusted somebody who was no longer
certified to sell securities and took out a remortgage against her home. This
personable fraudster made claims that the victims' initial investments were
guaranteed, and that he would only invest into low risk funds. The reality is
that he invested it into a lot of securities that were not listed. When the investments
didn’t achieve the results he had hoped, the guaranteed claims were not
followed through.
When trusting in someone to manage your investments, here
are a few things to be mindful of:
- A small single office investment firm, but they claim that your investment is guaranteed. Do they have the financial backing to actually be able to do this?
- Is the firm registered with the Canadian Investor Protection Fund (CIPF)? If the investment firm is unable to pay you their guarantees due to insolvency, at least you are covered by the CIPF. If they claim they are certified, verify it in the member directory here: http://www.cipf.ca/Public/MemberDirectory/CurrentMembers.aspx
- Do some online research of the investment firm, are there many complaints on forums and many negative media attention?
- Is the person conducting the transactions and investment research actually certified and academically capable? (eg. CFA, CFP, etc...)
- Are there any unusual restrictions on when you can withdraw your money?
- Are you able to see the value of your portfolio "on the fly" or can you only get monthly printed reports?
Have fun investing and good luck!
-TT
