Seniors are easy targets of scammers. However, with the basic understanding of how scammers work, seniors can easily safeguard their hard earned dollars. Having a clear idea about how to make safe investments can create a huge difference in your parents' retirement years, and as dutiful son or daughter, you should always help them to attain that.
This year, on July 27, 2014, celebrate the Parents' Day differently. Give your parents something special. After all they have done for you throughout your life, they definitely deserve something special.
Material gifts are easily available in the retail stores and online. You can just place an order and buy something. There's nothing special about it. But, if you can act as a teacher for at least one day and give them lessons on how to avoid investment scams, then perhaps you'd be able to make a positive difference to their retirement life. And that would perhaps the best gift for your parents.
Here are some lessons you can teach your parents to retire happily and peacefully.Lesson 1: Shoot questions before making an investment.
Parents are quite vulnerable to the tactics of scammers who build a false bond of friendship. They feel indebted when these people give them some advice on investment scams. Ask your parents to not blindly trust anyone. Teach them to investigate before making any investment. Tell your parents to discuss with family members, know about the potential risks and background of the company before making any decision.Lesson 2: Find out if the company is good enough for investment.
Your parents have always taught you to research before buying a product. Now, it is your turn to ask your parents to do the same while making an investment. Ask your parents to check the company reputation in the investment market in the following ways:
Mails and company press release should never be taken into sole consideration while making any investment.Lesson 3: Spend time with the salesperson to know if he is trustworthy.
Social interaction is not enough to know a person completely. Your parents need to find out if the salesperson has the right to sell securities. Next task would be to check if the salesperson or the company had any issue with investors in the past. The third task would be to check if any disciplinary action has been taken against the salesperson. Your parents can easily do the investigation for free by exploring the online database of Financial Industry Regulatory Authority (FINRA) and SEC.Lesson 4: Ask questions at the time of retrieving profits.
Your parents are investing their money for reaping profits. If the salesperson or the broker creates problems at the time of cashing out profits, then your parents must ask for a proper explanation. Chances are high that the salesperson has already taken away the money. Tell your parents to not get pacified when the salesperson says that the profit has been rolled over into some other investments.Lesson 5: It is a must to check unsolicited offers minutely.
Overexcitement is not good for health. If your parents receive get an unsolicited mail or a fax about a company, then advise them to get information about it from an independent source. Several scammers send emails, fax, articles to create buying frenzy on thinly traded stocks. This helps to increase the price of the stock and the fraudsters can easily sell their shares in the market. The price of the stocks falls rapidly once the fraudsters dump their stocks.Lesson 6: Stay away from offshore investments as much as possible.
It is best to stay away from offshore investments because you can never know what can happen with your money abroad if anything goes wrong. It becomes all the more difficult to locate and retrieve your money.
First thing first, tell your parents to not get scared or embarrassed. If your parents suspect scam or they're not completely satisfied with the explanations of the salesperson, then ask them to register a complaint with the state regulator or FINRA.
Where your parents can call to seek helpState Regulators: (202) 737-0900 SEC: (800) 732-0330 FINRA BrokerCheck: (800) 289-9999
Where your parents can go for assistanceSecurities and Exchange Commission
Office of Investor Education and Advocacy 100 F Street, N.E. Washington, D.C. 20549-0213FINRA Investor Complaint Center
1735 K Street NW Washington, DC 20006 Fax: (866) 397-3290
Where your parents can register a complaint
Online complaint can be registered at - www. finra.org. Disciplinary information about a broker can be accessed at - www.finra.org/brokercheck.