How to avoid becoming a victim of financial scams?

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A glance at an unopened email. to a mailing list, and some are probably some sort of investment or financial scheme. But what if the sender’s name is an advisor asking a client for a deposit? According to the Canadian Securities Administrators (CSA), the number of scammers impersonating legitimate financial advisors and financial planners has increased.

Mark McGrath, a certified financial planner (CFP) and wealth advisor at Sweeney Bride Strategic Wealth Advisory in Wellington-Altus Private Wealth Inc., says the problem with someone’s image is not what they came up with with clients. , but admits that maybe it is. required. After all, he never met most of his clients in person. He has clients located in several provinces while he works from his home office in BC.

But since he writes several posts each week about financial planning best practices on social media platforms like LinkedIn and Twitter, it’s likely clients are confident they can flag suspicious emails. Mr. McGrath also spends a lot of time communicating online and interacting with clients and prospects.

“I talk about highly technical financial topics online, and it’s very difficult for someone to imitate,” he says.

The first step in preventing fraud is proving to prospects that you really are who you say you are, he says.

Clients can verify an advisor’s credentials by visiting accrediting bodies such as FP Canada for those holding the CFP designation and confirming that the advisor’s status is in good standing and active. They can also confirm whether an adviser is in good standing with the CSA by looking up their patents in its national registration search.

Mr. McGrath says LinkedIn can be effective at establishing identity because each profile provides space for credentials, a professional photo and job information.

“A well-constructed profile itself shows that this is a real person and actually does this work for a living,” he says.

Inform customers about the process

Nadej Koskamp, ​​CFP, senior financial advisor and division manager at IG Wealth Management in Toronto, sees the potential for more fraud.

“It’s definitely something that’s been on my mind and made me a little more aware,” he says.

Although she has not been identified, she is often asked if she is the same Nadezh who runs several local bakeries. He didn’t.

His philosophy on fraud is to arm consumers with information to prevent it from happening. He reviews his information-gathering process several times a year, and more often with older customers because scams are constantly evolving and often target that demographic.

“In every meeting or anytime they’re looking for an investment, we also talk about fraud,” he says.

If Ms. Koskamp sends a document for clients to sign, they also know to expect a phone call from her right away. He will then verbally explain the document in more detail.

“They know they’re not going to get an email from me asking them for a wire transfer, because I already have access to their accounts, and when the money is deposited, I’ll call them,” he says.

Applications never go unnoticed

Aleem Dhanji, senior financial planner and senior insurance consultant at Assante Financial Management Ltd. in Vancouver, also takes steps to protect clients from fraud.

Since most of his clients reside in the Greater Vancouver area, he meets with all of them face-to-face at least once a year. His company has a process for requesting information. One rule of thumb emphasized to clients is that inquiries are never vague.

“Our requests are either consistent [action points] from a meeting or part of the process we follow every year,” says Mr. Dhanji.

As an example, he might email clients to collect all their receipts to prepare for income taxes, something he does every year. But he will never ask the client to put down a deposit for the investment. Such a thing is discussed over the phone or preferably as part of a face-to-face meeting.

“You want to make sure your customers know what to expect, so they’re comfortable and aware of what might happen,” he says.

When in doubt about correspondence he or his team receives, he advises clients to double-check by calling. Sometimes, if customers look closely at the email, they can see that even though the name is correct, the email address is slightly off, missing some letters.

“Never respond to urgent inquiries by email, because urgency calls for a phone call,” he says.

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