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To help you suss out a swindler ...
Be careful whom you take financial advice from warns Phil Heinlein
As
the great American showman P.T. Barnum famously put it, “There’s one
born every minute.” Talking to victims here of financial fraudsters
over the years I’ve often recalled this dictum. Back in the late
eighties we featured the sad case of Terry, a classy Englishwoman
living in Cannes. She’d met up with a British “adviser” who claimed an
office in Jermyn Street, W1 (it didn’t exist) and impressed her, she
admitted, because he was “beautifully dressed and spoke like a
gentleman”. Over dinner at the Carlton – where else? – she gave him a
cheque for £70,000. That was the last she saw of her money …
Terry’s tale has been replicated many times among people who’ve had a
mid-life windfall or sold a property or a business and then fallen
victim to a dishonest financial adviser who’s offered to make their
money grow like you wouldn’t believe. These guys can be very convincing
– so a few tips to help you suss out a swindler:
- To start
with, listen carefully to see if in his pitch he attempts to relate his
advice to your particular circumstances. If not, he obviously doesn’t
envisage a long-term relationship with you.
- Ask about his
background and experience. Get a CV – and check it out. If he claims to
be entirely “independent” be wary. Even if honest, he could fall sick,
die or even go mad.
- If he claims to work for a company get
full details and check them out. Is it subject to a regulatory
authority? Where did it last deposit a set of accounts?
-
“Location, location, location”: be very cautious about a guy (there are
very few women in this dubious trade) who works for an organisation
situated in a different country from where he’s talking to you and
who’s pushing products from yet a third country. There are countries
and countries, of course. If there’s mention of Liechtenstein, Panama,
Nauru and such places smell a rat.
- If you decide to do
business with a financial adviser whose credentials are not
unambiguously sound get a detailed written agreement and before going
any further have it vetted by your lawyer and/or banker.
One thing
to remember above all: in the real world the chance to make big money
fast with no risk is very rare. Terry cried when she told us her story.
After handing over that cheque in the Carlton she was left literally
“ruined”. Better to stick to the sort of tried and tested investment
advisers who you’ll find in our pages.
From Reporter 114 - Apr/May 2006
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Finance and Banking 
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