It’s understandable to want to enjoy your life in California. One way to make the most out of your money is by working with a financial advisor. Unfortunately, not every financial advisor has your best interests in mind. A small number of financial advisors and the companies they work for are only out to scam their customers. With that in mind, here’s a closer look at some of the most common scams by financial advisors.
Misrepresentation
Chances are, you’ve heard amount many types of credentials in the finance industry. There are CPAs (certified public accountants), CFAs (certified financial planners), RIAs (registered investment advisors), and many others. However, the average person isn’t going to know how all of these titles differ from one another. Because of this, the financial industry is full of people without the right experience and knowledge telling you how to invest your hard-earned money.
Ponzi scheme
One of the most common examples of white-collar crimes is a Ponzi scheme. In this type of scam, financial advisors promise would-be investors high returns. After the advisor gets your investing money, they give it back to the original group of investors they duped. Essentially, no investor is getting money based on their investments. Instead, scammers pass money from new investors to older ones.
Affinity fraud
Many financial advisor scams require some level of trust between everyone involved. This is why affinity fraud has unfortunately become so popular. The idea behind this scam is to build trust with a victim, usually around religion, location, or their cultural backgrounds.
If you or someone you know was the victim of white-collar crime, it could be time to contact a lawyer. By doing this, you might receive compensation for your financial-related losses.
