What to Watch Out For

Sunday, September 9, 2007

Here are some tips for avoiding fraud artists:

Don't agree to listen to investment advice from someone you don't know, even if it comes with a free lunch or dinner.

Do check out anyone who offers investment advice. The Financial Industry Regulatory Authority offers an online service called BrokerCheck ( www.finra.org/brokercheck). Also, call your state securities administrator to ask if the adviser is registered.

Don't be won over by a long list of credentials unless you know what they mean. FINRA defines more than 60 titles, from AEP (accredited estate planner) to WMS (wealth management specialist).

Be wary of solicitors who emphasize how they share your interest in religion, collecting figurines or Civil War history. Sometimes they go so far as to offer to pray with you when what they're really up to is preying on you.

Run in the other direction from someone who pressures you by saying there are only limited chances left to get in on an investment.

If you're looking for a financial adviser, look for someone who charges fees for services rather than works for commission. Ask friends and colleagues for suggestions, but also ask what it is that they like about an adviser. It may not be what you're looking for.

If you don't understand a product, don't buy it.

© 2007 The Washington Post Company