In the most recent news from Wall Street, securities fraud has affected individual investors, pensions and charitable organizations. Here are four key safety tips that may help you prevent this from
happening to you.

1. Know your advisor.

Investment Advisors are registered with government organizations. You can research registrations and review any past complaints with the SEC (www.sec.gov), or with the respective state regulatory agency. If a firm is a broker-dealer, you can research it with the Financial Industry Regulatory Authority (www.finra.org). You should also be aware of what you have authorized your Advisor to do. For example, if you have granted discretion over your investments, you have given permission to buy and sell investments to meet your stated objectives, without your approval for each individual trade. The authority you have granted should be stated in our Client Services Agreement. If you can’t locate it, ask for a copy from your Advisor.

2. Know your investments.

Consider stocks, bonds, ETFs, and mutual funds that are publicly traded and listed on major exchanges like the New York Stock Exchange. They are valued independently at least daily, if not minute by minute, when the exchange is open. You can check their reported returns against your own portfolio. If you can’t look up the prices and performance of what you own in the newspaper or on the Internet – that’s a red flag – ask more questions. If you choose to invest in complex securities like private placements, then you have additional homework to do. These private placements include real estate limited partnerships and non-traded REITS. Be sure to do your homework and be satisfied with the competency and integrity of the sponsor.

3. Use an independent custodian.

By utilizing an independent custodian, there is objective, unbiased pricing of underlying securities. Investment performance can look better if the prices reported to clients are manipulated, showing winning performance year after year despite the ups and downs of the market. Your custodian should receive security prices through well-known, third-party pricing vendors or directly from issuers. In many cases, prices are provided on a real-time basis for most securities. Your custodian should have no input on asset pricing or valuation. You should get your monthly statements directly from your custodian and not just your Advisor.

4. Check on protection.

Make sure your custodian is a member of the Securities Investor Protection Corporation (SIPC). The securities in your account are protected up to $500,000, of which $100,000 may be applied to cash. For additional information, please visit www.sipc.org. Many custodians also provide additional coverage through private insurers that will enhance your protection above the limits of SIPC. SIPC protection and supplemental coverage protect against losses from brokerage failure, not market value decline.

One final thought: If it sounds too good to be true, it probably is. Beware of consistent annual returns that are out of line with established benchmarks.

__________
“Investor Education for Main Street America”

---

"Investor Education for Main Street America"