Peregrine Financial Group and a missing $200 million? Cedar Falls, Iowa, the Heartland, where corn is tall and people are honest. It's of small towns where people leave their keys in their cars and they don't lock their front doors. Embezzlement of this nature happens in New York, Greece, but not in Iowa.
Peregrine Financial Group was an Iowa-based brokerage firm and the CEO allegedly used $200 million of his clients’ money to keep the business going. He attempted suicide and confessed to embezzling in his suicide note.
If this can happen in Iowa, it can happen in your neighborhood and with you investment counselor. I do not want to imply that all financial advisors are dishonest, but the few bad ones remind us to keep on our toes. A few basic points to keep in mind as you talk to your financial professional:
1. No one is going to be or should be more concerned about your financial wellbeing than you. It is your money and your future. You need to take responsibility for your financial future. This may require you to increase your financial literacy by talking a personal finance class, researching the investment on your own, and being aware of market trends. Don't bury your head in the sand when it comes to financial knowledge - you can learn it, you can do it.
2. If it sounds too good to be true, it probably is. How often have you heard that? If you are making money on your investment and everyone else is losing, it may be time to question your investment broker.
3. Ask questions. If you don't understand an investment or investment strategy, question it. This is a great way to increase your knowledge.
4. Use your BS detector. If an investment doesn't feel right, smell right, and you have an uneasy feeling about it, it may not be the right investment for you.
5. Be aware of the con-artist. The "con" in con-artist stands for confidence. The goal of the con-artist is to get you to trust him or her so he or she can rip you off. Be aware of these phrases: "this is standard language and you don't need to read every detail," "trust me, everyone is doing this." I have a special deal for you that not everyone can have."
Again, it is your money and being knowledgeable about the investment options helps you make wiser investment decisions.
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