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Avoiding Ponzi Schemes – 4 Easy Ways to Protect Your Investments

September 21, 2018

A several years ago, Foxstone Financial’s Chris Ravsten was interviewed by the Denver Business Journal about ways investors can protect themselves and their investments from Ponzi schemes. With a few high-profile schemes being uncovered this summer, we thought the time was right to republish Chris’ suggestions for investors.

Here are 4 easy ways to protect yourself & your investments from Ponzi schemes.

1) Never Make Your Checks Payable to the Individual Advisor or their Firm
Instead make your checks payable to a regulated third-party organization (bank, clearing house, brokerage firm, mutual fund, insurance company, etc.) that will be the custodian of your investment account.

2) Statements Should Always Come From a Third Party
If your advisor is doing things properly, your investment statements should always come from a regulated third-party organization which has custody of your money. Statements should never come directly from your investment advisor or be on the advisor’ letterhead. 

3) Have Real-Time Online Access to Your Account
Another important protection is to make sure you have access and log-in credentials to always see your investment account online at your advisor's third-party custodian. That way you can always verify what your advisor is telling you is indeed accurate. 

4) Be Skeptical & Ask Hard Questions.
If an investment advisor's story or performance sounds too good to be true, it could be. Do your homework, ask lots of tough questions, check unbiased references and if you don't get reasonable answers, look elsewhere

The majority of advisors out there are honest, helpful people that keep their clients’ best interests in mind, and they should have no issues with the protective suggestions we have outlined.

About Foxstone Financial
Foxstone Financial is a Denver-based investment advisor that uses the latest artificial intelligence investment technology, decades of market experience and a network of specialized partners to serve clients that expect better than average.