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Investing can be daunting for many. Which investment strategy is best? How do options work? What's a derivative? And who do I trust with my investments and life-savings?
A common complaint Fisher Investments hears from investors is there are too many products/services and too many advisers to choose from. There are myriad types of investment advisers, from small independent firms to large multi-national conglomerates. Finding the right financial advisor with a suitable product or service is like navigating a complex maze—each turn could send an investor down a dead-end path.
To make matters more complex, how does one avoid falling prey to the con-artists and financial fraudsters prevalent in our society today?
Ken Fisher's How to Smell a Rat
Ken Fisher, CEO of Fisher Investments, has been in the investing business since 1979 and oversees more than $38 billion* for thousands of high net worth individuals and over 100 prominent institutions. In addition, he has been providing investment insights to the public via his Forbes "Portfolio Strategy" column for 25 years and his many books on investing and wealth creation. In his 2009 New York Times best seller, How to Smell a Rat: The Five Signs of Financial Fraud, Ken Fisher offers 5 crucial questions to ask when considering hiring an investment professional.
Avoiding Financial Fraud and Advisor Complaints
A good rule of thumb is to keep emotion out of your decision when hiring a money manager. Bernie Madoff was charismatic, a personal friend of many of his investors, and projected an air of exclusivity. And his clients received consistently good returns for years, without complaint. But unfortunately for Bernie, et. al., bear markets have a way of crushing a house of cards—and his came crashing down, taking out all his investors, his friends, and charitable organizations.
| What Are the Five Signs of Financial Fraud? |
1. Your adviser also has custody of your assets—the number one, biggest, reddest flag.
2. Returns are consistently great! Almost too good to be true.
3. The investing strategy isn't understandable, is murky, flashy, or "too complicated" for him (her, or it) to describe so you easily understand.
4. Your adviser promotes benefits like exclusivity, which don't impact results.
5. You didn't do your own due diligence, but trusted an intermediary.
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If you follow these guidelines, you may be successful in choosing the right advisor and avoiding future complaints. For information about purchasing Ken Fisher's investment books, click here.
*As of 3/31/2010
** Thirty for Thirty, Investment Advisor, 5/1/2010
***Ranking as of 5/21/2010. Ranking and methodology can be found at http://www.cxoadvisory.com/gurus. Market calls represent Ken Fisher's public descriptions of the overall market and don't represent the performance of Fisher Investments' clients or any strategy of Fisher Investments. Fisher Investments has no affiliation with CXO Advisory Group.
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About Ken Fisher
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- 25-year plus Forbes "Portfolio Strategy" columnist
- Recognized as one of the top 30 most influential individuals in the investment industry over the last 30 years**
- Author of 6 books, including 3 New York Times bestsellers
- CEO of Fisher Investments with over $38 billion in assets under management*
- Top-ranked market forecaster by CXO Advisory Group***
- Globally recognized as a financial guru
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Author: Ken Fisher with Lara Hoffmans
Hardcover: 224 pages
Publisher: Wiley (July 2009)
ISBN: 978-0470526538
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