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How to protect yourself from financial fraud
(StatePoint) There are more than 300,000 professional financial advisors in the U.S. It’s fair to say that a majority are dedicated to helping their clients achieve their financial goals. However, some unethical individuals seek to take advantage of clients’ trust and lack of financial knowledge to benefit themselves.
You should look for any signs of fraudulent or unethical practices when working with a financial advisor. These include:
• Not receiving any reports on your investments, or only getting them directly from your advisor.
• Your advisor completing forms for you. A well-intentioned but careless financial professional can get your information wrong; an unethical professional might falsify data.
• Receiving information from your advisor not on company stationery or sent via a personal email address. Your advisor could be offering you an opportunity that his employer does not know about.
• Your advisor pressuring you to make quick decisions on a recommended transaction, which may be described as a “limited time offer” or presented when you are going through a major life change, such as a personal loss.
• Your advisor offering an opportunity that sounds too good to be true -- such as a high-return investment without risk -- or declining to provide details about the opportunity because “it’s too complicated.”
These behaviors could be red flags that you are vulnerable to financial abuse. Fortunately, there are several simple steps you can take to protect yourself from unscrupulous advisors:
• Ask your financial professional if they are a fiduciary. This obligates them to base their recommendations on your best interests, fully disclosing any conflicts of interest (actual, potential or perceived). If your advisor avoids the question or doesn’t understand the term, go elsewhere.
• Get confirmation, in writing, that the advisor’s employer or company approves and supervises recommended investments. If your financial professional is a sole practitioner, verify that she carries professional liability insurance.
• Always ask your advisor how much a proposed transaction will cost you and if he will get paid from the recommended transaction.
• Tell your advisor when you don’t understand something. Ethical professionals will be happy to explain. If you don’t understand the explanation, ask for it to be put in simpler terms.
• Make sure you receive regular statements from independent third-party sources or verify that the investment manager is audited annually by a reputable independent accounting firm.
• Never leave blanks in paperwork that someone else could fill in without your knowledge or consent. Ask your advisor to send you copies of all final, submitted documents.
For more tips to ensure your financial security and to find a Certified Financial Planner professional near you, visit letsmakeaplan.org.
Identifying and avoiding the potential for financial fraud or malpractice is key to a successful, trustworthy partnership with your financial advisor.
that will help you achieve your goals.
Tips to build good credit during and after college
(StatePoint) There’s a lot of learning that takes place during and after college, including many lessons outside of the classroom. When it comes to personal finance, however, young people don’t need to learn their lessons the hard way.
Consider these tips to help you establish good credit that will lay the foundation for a healthy financial future --- well beyond college:
Do Your Research
With so many reports of rampant consumer debt, you may be tempted to shy away from opening a credit card account, but opening a credit card is a crucial step in establishing a credit history. A healthy credit history is not just necessary for most home and car loans, in many cases, it’s also required for establishing accounts with utility services and signing apartment leases. What’s more, good credit can help you avoid security deposit fees, get better insurance rates, and even help you land that dream job, as many employers run credit checks on candidates.
The good news is that 83 percent of college graduates and 57 percent of current college students have at least one credit card, according to “Majoring in Money,” a recent national study by Sallie Mae and Ipsos. Also, nearly all young adults -- 97 percent -- make at least the minimum payment each month. Moral of the story? Get a credit card and use it responsibly.
There are many credit cards marketed specifically to young people. Make sure to select your credit accounts wisely and watch out for programs offering rewards and benefits that make maxing out, and then owing big, all too easy.
Instead, look for credit cards designed to promote and reward long-term financial responsibility, offered by financial institutions committed to customer success. For example, Sallie Mae is introducing a new suite of credit cards with a range of benefits that do just that. The Sallie Mae Ignite card, for example, is designed to help college students responsibly establish and manage credit. For those looking to make progress towards important financial goals, the Sallie Mae Accelerate card offers a cash back bonus program designed to help pay down any student loan. Finally, the Sallie Mae Evolve card, automatically rewards a cash bonus on your top two purchase categories each month.
All three cards feature universal benefits, including U.S.-based customer service, free monthly access to credit scores, immediate access to the card upon approval, a mobile app, and tools to deliver security and control. To learn more, visit salliemae.com/credit-cards.
“Our established relationships with college students and graduates helped us understand what they’re looking for in a credit card,” says Donna Vieira, executive vice president and chief marketing officer, Sallie Mae. “These new credit cards, co-created and developed with students, parents and recent graduates, provide benefits tailored to their needs.”
Don’t let credit be an undue source of stress as you navigate early adulthood. Find the right products designed with your needs in mind and establish healthy financial habits.