Investors, especially those nearing retirement age, fear scammers when attempting to invest in specific holdings like precious metals. Companies specializing in self-directed individual retirement accounts offering alternative investments like physician commodities, including precious metals, are few in number if clients seek out only reputable, reliable, long-standing examples.
The skilled, knowledgeable firms (check out www.consumeraffairs.com/ to get more idea of this company) have to face the repercussions of those committing fraud.
Clients come to them already hesitant to their services after being involved in unsavory dealings with less than legitimate companies. It pays to be able to spot the bad seeds, so when you find the good apples, you realize they’re genuine.
In doing so, let’s look at a few signs of investment scams to help you recognize the bad from the good.
Tips On Identifying Legit Companies Like Lear Capital From The Not So Legit
Lear Capital has been servicing precious metal investors for over 20 years. Companies like this have a solid foundation of investment followers who watch as they uphold their policies and practice the highest standards with their clients.
Not all companies are of this caliber, but then not all of the dealers in the industry are legitimate. Many are frauds seeking out predominantly those in the retirement community to scam them of their holdings. Let’s look at some signs that can warn you that you’re in the throes of fraudulent activity.
● The rhetoric used speaks to IRS approval.
Scammers will always enlist the IRS codes as part of their scheme since these are strict for investing in gold or other precious metal self-directed accounts. Without being compliant with the regulations, an investor will face fines and penalties.
The fraud will tell the investor that there is express IRS approval across the board, untrue. In actuality, the Internal Revenue Service doesn’t become involved with endorsement, authorization, or reviews of any specific security, financial material, or investment opportunity to ensure suitability for a self-directed IRA.
The bureau advises what is prohibited, including alcoholic beverages, life insurance, jewelry/gems, collectibles like antiques or art, and particularly precious metals of an unknown or insufficient purity level. They otherwise make no suggestion, and anyone that makes such claims is being deceptive. Open here for tips on scams of which you should make yourself aware.
● Making an inappropriate statement regarding custodial services
No company should make implications about the IRS-approved custodial services, especially that the entity will guarantee the client against losses. The custodian will not evaluate an investment for a company, nor will that much such guarantees on a self-directed IRA.
Custodians are known to carry insurance in the instance of physical loss. For instance, if a custodian is responsible for your precious metal, they often canary coverage against loss or theft of the physical commodity.
But none of these entities will provide a guarantee that there will not be an investment loss. This is untrue and a scam.
● A promise of significant gains with no chance for risk
You’ll find this to be a significant indication of fraud. When a dealer promotes higher than average market yields within a set amount of time with a guarantee on top of it with no chance for risk – that is too good to be true.
When something boasts as too good to be true, it often is and should be questioned to the ground. An investment that’s far-reaching beyond the market yields needs to come with risks; that would be a given.
● Licensing issues in the past
When working with a dealer, the past performance is indicative of what you will be exposed to. It’s essential to do due diligence in checking for license suspensions, fines, a history of fraudulent activity, or any type of disciplinary action taken against the company. All of these issues would be a reason to walk on to a different provider.
Checking with the Better Business Bureau and Consumer Affairs authoritative agencies are quick ways to eliminate bad apples in your batch. These agencies offer reviews, ratings, and customer complaints plus indicate fraudulent and scam activities with individuals and companies.
One final takeaway, if you have a promoter who is encouraging you to put entire retirement holdings into one primary product for investment risk is unreasonable and unsavory. Take caution with any company that suggests that all wealth be focused on a single development.
The suggestion in the investment world is that investors diversify their holdings, never focus on any one class or any one individual asset. That is a substantial risk for losing wealth.
Anyone who suggests that you place everything on any one product likely intends to scam you of your life savings. Instead of questioning their behavior, walk away.