According to the North American Securities Administrators Association (NASAA), the ideal victim for an investment scam artist is an elderly widow. Con artists know that senior women are vulnerable after the death of their spouse. Unscrupulous Investment Professionals will not hesitate to take advantage of the situation, especially when there may be large insurance settlements involved.
Although it may be uncomfortable to discuss financial issues with relatives and friends, investment professionals can prey on isolation, so be sure to discuss prospective investments with people you trust. If you are discouraged from discussing the investment, that should be seen as a red flag.
The best way to avoid investment fraud is through education. Never make an investment decision without first doing your homework. For example, check out the broker or investment professional who solicited you. We have written extensively on this topic in our article, Reducing Your Odds of Financial Loss Starts with Choosing the Right Investment Professional.
Ensure the investment you are considering is registered. There are registration requirements for securities, brokers and brokerage firms. Read more in our article, Registration Requirements for Securities, Brokerage Firms & Investment Professionals.