Alligator-Proofing Your Retirement Alligator Proofing Your Retirement Heidie.pdf · Why this...
Transcript of Alligator-Proofing Your Retirement Alligator Proofing Your Retirement Heidie.pdf · Why this...
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Alligator-Proofing Your Retirement
Heidie George
Examiner, Utah Division of Securities
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Why this matters to you . . .
These are the top four results when you google “alligator proofing your estate”.
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You are a target.
(I know you may not like it, but it’s true.)
Why?
– You have assets (retirement nest egg)
– Interest rates are low – chasing higher returns
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Who is taking aim at you?
1. Con Artists/Fraudsters
1. Friendly salesmen who want to sell you “safe and secure investments.”
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The Guy Next Door with a “Can’t Miss” Investment Offer
“Buddy, have I got a deal for you!”
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• Power
• Influence
• Charisma
• Strong Cover
Characteristics that fraudsters share are:
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• Credentials
• Performance returns
• Charges or expenses
• Risk (improperly minimizing)
• Financial Statements
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Recognizing and Avoiding Investment Fraud
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The Red Flags
Promise of High Returns
Promise of Little or No Risk
Prey on Investors’ Trust
High Pressure Sales Tactics
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The Ponzi Scheme
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• The hallmark of all Ponzi
schemes is to create the illusion of
a successful investment or
business by using money from new
investors to pay earlier investors.
• There is typically no legitimate
business revenue, but investors are
provided with false statements or
reports to create the appearance of
high returns on investment.
The Ponzi Scheme
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Madoff was able to keep
his Ponzi running for
40+ years, but all Ponzis
eventually collapse
(most of them much
sooner) when the new
money coming in can’t
keep pace with the
demand for money
going out.
The Ponzi Scheme
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Start-Up Companies
New companies typically require capital ($$$) in order to start the operations of the business.
Watch out for:
Offers of stock that you can not easily resell.
Investments in unsecured promissory notes.
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Other Common Investment Scams
FOREX Trading Programs
Equity Stripping or Equity Milling
Precious Metals Scams
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How to protect yourself from fraudulent
investments
• Understand Risk v. Reward
– Rule #1 for investing: Risk and Reward go together and cannot be separated.
– Every con artist tries to break
Rule #1.
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Aggressive Sales
Tactics
• Fear – Create a problem he can fix
• Greed – “Think of what you could do with this money”
• Trust – “I am doing this as your friend”
• Scarcity – Only one spot left; Only one day left
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How to protect yourself from aggressive sales tactics
• Understand costs and fees
– Even a small difference makes a big difference over time.
• Understand what your “Adviser” is licensed to sell
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Affinity Fraud
Affinity fraud uses common membership in a church, family, tribe, etc.
“I am also a member of your _________ so you can trust me.”
Name Dropping -- Same “deal” was
made with a prominent leader of your organization.
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Let’s make this really simple . . .
1. Slow and steady wins the race (even after you retire).
2. Remember Risk v. Reward
3. Don’t be pressured or frightened into any financial decision.
4. Don’t invest with your _______. (neighbor, relative, church leader, co-worker . . .)
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Thanks!
Heidie George
Securities Examiner
Utah Division of Securities
Invest wisely, and watch out for those alligators!