The criminal world’s best and brightest minds have targeted the advisory business as worried investors in the current low interest rate climate fall prey to scams that promise high returns, Financial Serial Killers co-author Tom Ajamie said Thursday at the annual meeting of the Financial Planning Association’s New York chapter.
“These financial scams are a quick way to make a lot of money and more profitable than knocking over an old lady with a purse,” Ajamie warned several hundred FPA advisors in his keynote address. “You don’t have to get your hands dirty, and the criminal element attracted to these scams are very intelligent.”
Here are Ajamie’s recommendations for what that talk between advisors and clients should cover:
“Guaranteed” high returns. Advisors are seeing more pressure from yield-hungry clients to invest their money in overly risky securities, Ajamie said. “Reaching for return is often an invitation to disaster,” he said, noting that advisors must judge investments in terms of suitability, age appropriateness and whether a client has sufficient intelligence to understand the product.