Financial scams and common sense rules

The case is well known, it makes the news because it involves famous people and the most popular sport. But above all, it is about scams and how too many people still expose themselves to huge risks when deciding how to invest their assets.

Yet there are small common-sense rules that, if adopted, can limit risks (not only of scams, but also of poor asset management) and allow for a positive experience from investment activities.

1) Turn to a consultant registered with the Register. The only individuals authorized to provide consultancy services are those registered with the single register of financial advisors. The consultant is required to inform the client of their registration resolution before operating.

2) Turn to an independent consultant. It is always good practice to keep separate the person providing the consultancy and the person(s) acting as custodian or intermediary of the financial instruments. If the person providing the consultancy cannot touch the funds, the risk of improper conduct is reduced. If the person providing the consultancy has no ties to the instruments or services offered, the risk of conflicts of interest is reduced.

3) Turn to a consultant who explains what they propose. If the consultant cannot explain their strategy and recommendations in an understandable way, it is better to walk away. A good consultant knows that investment activity is complex but is able to translate it into an understandable summary. If this does not happen, you can certainly find a better consultant.

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