5 Signs That Your Investment Advisor Is Scamming You

Sign No. 1: An Adviser Won't Provide Real-Time Trading Information.
In the case against Capital Management Associates, the SEC alleges that the duo ran trades without specifying whether they were for clients' accounts or for the owners' accounts. Then, once the profitability or loss of the trade was assured, the company would backdate that information, assigning the profitable trades for themselves and the losers to clients.

Sign No. 2: An Adviser's Returns Are Too Good to Be True.
Bernie Madoff swindled investors out of billions of dollars in what has been called the largest Ponzi scheme ever uncovered. While Madoff, a former chairman of the Nasdaq stock exchange and securities representative on SEC industry panels, knew enough to hide from the regulators for decades, his returns were too consistent to be real.

Sign No. 3: You're Getting Hot Tips That You're Told You Need to Act on Now.
Any legitimate investment worth owning will still be available tomorrow, after you've had the time to think about it (and research it independently). Any pushy advisor telling you things like, "You've got to act today to get in on the ground floor" or "You don't have time to read the paperwork" is asking you to act without reviewing something, which is a common hallmark of a scam.

Sign No. 4: You're Promised Investments That Will Be "No Cost to You."
If you're working with a financial advisor, that advisor is getting paid by you, either directly by checks you write or indirectly via commissions, spreads, or fees generated by the investments you make. Any adviser claiming otherwise is hiding something -- likely an outlandishly high fee for placing an investment or insurance policy, which can often run north of 7 percent of the invested amount.

Sign No. 5: Your Account Is Being Churned and Burned.
And speaking of fees, be wary of an adviser who regularly churns your account through multiple trades of similar types of annuities, mutual funds, or other investments. If your adviser is getting paid through a hidden commission from making the transaction, that activity is very likely lucrative for the adviser ... but not so much for you.

The contents of this post are pieces of a larger article. For more information and to view the full article please visit this link 5 Signs That Your Investment Advisor Is Scamming You

Behavioral Red Flags of Occupational Fraud

These are the red flags to look for if you're concerned about fraud. They apply to large and small businesses. The first 5 flags are the most common. 

1. Living Beyond Means
2. Financial Difficulties
3. Control Issues/ Unwillingness to Share Duties
4. Unusually Close Association with Vendor/Customer
5. Wheeler-Dealer Attitude
6. Divorce/ Family Problems
7. Irritability, Suspiciousness, or Defensiveness
8. Addiction Problems
9. Refusal to Take Vacations
10. Past Employment-Related Problems
11. Complained About Inadequate Pay
12. Excessive Pressure from Within Organization
13. Past Legal Problems
14. Instability in Life Circumstances 
15. Excessive Family/Peer Pressure for Success
16. Complained About Lack of Authority 

The Benefits of Pre-Employment Screenings: Part 2

Reduce Employee Turnover: Hire the Right People

Pre-Employment Background Checks help screen in employees who remain employed longer because employers are able to make the "Right Hire" the first time. Employers are able to hire the right people by increasing the accurate and objective information available to hiring managers. The information provided by a comprehensive background check enables employers to build a competent workforce and reduce the likelihood of hiring dishonest employees and employees with drug and alcohol problems. Gathering information from multiple sources provides a clearer understanding of the applicant's qualifications and reduces an employer's risks.

Avoid Negative Publicity

Prior history is a good predictor of future performance. Background checks are used by employers to verify the freely volunteered information provided by applicants (usually through a resume or job application). Because of the large number of applicants who make false claims, Criminal Record Checks, Prior Employment Verifications, Education Verification, License Verifications, and other research tools can reveal potential problem areas. Through careful and wise use of the information obtained in proper background checks, employers greatly reduce the risk of negative publicity.

In many cases there is little difference in the eyes of the public or the law between employees and volunteers who perform essential functions of an organization. Volunteers should be screened just as carefully as employees who would be performing similar roles. The public, courts, and regulatory agencies expect extra vigilance during the selection process of those who will be dealing with the infirm, the elderly, and children, as well as those who will have access to living quarters or residences. Such staff should be carefully screened. Proper background checks greatly reduce the likelihood of hiring a bad employee or volunteer, and thus they reduce the likelihood of negative publicity.

Meet Regulator , Insurance, and Customer Requirements

Many employers are required by government regulation, their insurance carriers, and/or their customers to conduct pre-employment screenings. To achieve all the benefits discussed above, employers should meet any external requirements and then seriously consider obtaining more complete background checks where appropriate. A complete pre-employment screening should include: 

• Social Security Search
• County Criminal Search
• OFAC Specialty Designated Nationals List/ Blocked Persons List
• Education Verification
• Prior Employment Verifications
• Comprehensive Report (position specific)
• Credit Report (position specific)
• DMV Records (position specific)
• Live Scan Fingerprints (position specific)

The Bottom Line: Success

Why do pre-employment screenings? The bottom line is that pre-employment background checks help an organization be more successful. That means greater profits to for-profit organizations and greater impact for non-profits. Thorough background checks help employers:

• Reduce the high cost of turnover by screening in employees who stay longer
• Reduce losses from employee theft, employee fraud, drug and alcohol abuse, absenteeism, workplace violence, and litigation
• Avoid wasted benefits
• Reduce training and employee development costs
• Increase productivity through hiring employees with better work habits, attitudes, policies, and practices
• Enhance professionalism by "screening in" appropriate workplace attitudes
• Decrease insurance costs
• Meet regulatory, insurance, and customer requirements

Background Check Benefits for Employees

An applicant applying to an employer who conducts thorough background checks will not be competing against applicants who lied about their experience or falsified their credentials.

Employers who conduct careful background checks are usually better organizations to work for. They:

• Are better managed
• Place greater value on employees
• Provide a safe workplace
• Are willing to invest in quality employees

Note
Keep in mind that, though performing pre-employment screenings may contribute to a more honest applicant pool, employers or HR departments will most likely not give out character references on former employees. This is because if an applicant is not hired based on a reference given by a former employer, that applicant can sue their former employer. It seems completely ridiculous; however, there is nothing that would prevent an individual from doing this. In order for a company to avoid the costs of going to court, they simply will not comment on a former employee's behavior; even if that behavior is extremely relevant towards the applicant's credibility.


The information presented here has been gathered from our own experiences with performing pre-employment screenings as well as information from A Matter of Fact. 

The Benefits of Pre-Employment Screenings: Part 1

Increase Applicant and New Hire Quality

The first benefit of background checks that most businesses see is an increase in applicant quality. Companies that utilize pre-employment screenings often see an almost immediate improvement in the quality of applicants once it is advertised that they conduct thorough background checks. A complete employee screening process:

• Results in fewer applications with serious discrepancies
• Discourages applicants who are trying to hide something
• Increases applications from applicants who want to work in a safe environment
• Increases the quality of new hires due to an improved applicant pool and improved selection process

Reduce Violence in the Workplace
Prior history is a good indicator of future performance. Background checks are used by employers to identify applicants prone to unacceptable workplace behavior. Background check tools such as Criminal Record Checks, Prior Employment Verifications, Education Verifications, License Verifications, and other research tools can reveal potential problem areas. 

Protect Against Neglegent Hiring Liability

Because employers have a moral and legal obligation to provide a safe work environment, knowing whether a potential employee has been involved in criminal or dishonest activity (such as drug or other substance abuse, reckless behavior, theft, or dangerous and violent behaviors) allows the employer to better determine if an applicant is appropriate for the job and work environment. Pre-eimployment screenings allow an employer to better determine if an applicant poses a potential threat to other employees or customers.

Background check tools such as Criminal Record Checks, Prior Employment Verifications, Education Verification, License Verifications, and other research tools can reveal potential problem areas and provide documentation that an employer has taken "reasonable care" in the hiring process. Thorough background check documentation is an important element in reducing negligent hiring liability.

NOTE: If Your Employees:

•   Access consumers' financial, medical, or personal information

•   Access consumers' living quarters or residences

•   Work with the infirm, the elderly, or children

•   Work with hazardous materials

•   Are responsible for the safety of themselves and others

You are generally expected by the public, the law, and the courts to be extra-vigilant when screening employees.

Reduce Employee Dishonesty Losses

Prior history is a good predictor of future performance. Background checks are used by employers to verify the freely volunteered information provided by applicants (usually through a resume or job application). Background check tools such as Criminal Record Checks, Prior Employment Verifications, Education Verification, License Verifications, Drug Screening and other research tools can reveal potential problem areas. Through careful and wise use of the information obtained in complete background checks, employers greatly reduce or eliminate the risk of employee dishonesty losses by avoiding individuals who exaggerate or falsify credentials on resumes and job applications and reduce drug-related theft by encouraging a drug-free work environment.

Screen Employees With Access to Livign Quearters

All employees (including temps, part-time workers, contractors and volunteers) who have access to consumer residences or living quarters should be backgrounded. A background check, or application verification, confirms the information provided by the candidate using independent sources such as criminal and civil court records, prior employer records, educational institution records, and credit or motor vehicle reports.

While it may seem unfair, the courts have repeatedly found employers responsible for the criminal actions of employees on the job, and, in some cases, off the job. The average award in security (personal safety) negligent hiring cases is more than $1 million. Essentially, the courts see a background check as cheap insurance against repeated criminal actions.


Note
Keep in mind that, though performing pre-employment screenings may contribute to a more honest applicant pool, employers or HR departments will most likely not give out character references on former employees. This is because if an applicant is not hired based on a reference given by a former employer, that applicant can sue their former employer. It seems completely ridiculous; however, there is nothing that would prevent an individual from doing this. In order for a company to avoid the costs of going to court, they simply will not comment on a former employee's behavior; even if that behavior is extremely relevant towards the applicant's credibility. 



The information presented here has been gathered from our own experiences with performing pre-employment screenings as well as information from A Matter of Fact.