You’re a boomer and still in full possession of all of your faculties, including your ability to sniff out a fraud, right? Wrong. A recent article by Kelly Greene in the Wall Street Journal called “Boomers Wearing Bull’s-Eyes” reports that fraud claims against those 50 and older more than doubled between 2009 and 2010. Apparently, the typical person’s ability to make financial decisions peaks at age 53.3 and goes downhill from there – at least that’s what the Boston College Center for Retirement Research determined. Perhaps this is why there has been a recent surge in investment fraud targeting baby boomers.
One very common fraud, a la Bernie Madoff, is for dishonest financial advisors to send their victims phony investment account reports listing trades that were never made or returns that were never earned. As you may know, Laird Norton Wealth Management Asset Strategies participates in a custody audit every year to prevent this type of fraud from taking place because we are held to SEC regulations for custodians. This audit not only provides assurance that the reports our clients get from us are the real deal, but also confirms that our statements are the same as those produced by the custodian we use and that we are in compliance with the SEC. That said, I encourage you to ask your current financial advisor or wealth manager what safeguards they have in place to prevent this type of fraud from taking place. If they do not have a clearly-defined process, you might want to consider placing your wealth in safer hands.