The brokerage industry’s top regulator is worried that consumers looking to increase their investment yields are being sold risky and complicated products that could backfire.
According to FINRA, the self-regulatory authority for the investment brokerage industry, the continuing near-zero interest rate environment is creating an opening for unscrupulous salespeople.
“The challenging economic environment can lead individual retail investors to be susceptible to recommendations to chase yields without necessarily understanding the risk-versus-reward tradeoffs, particularly as more esoteric or complex products find their way into retail portfolios.” - FINRA
FINRA’s concerns were included in a letter to its members that offers clues to consumers about sales practices and products to avoid.
Jentner Wealth Management shares these concerns. During times of uncertainty, it is common for people to get enticed by salespeople who offer investments that appear to have benefits which are unsustainable or untrue. Be careful. Seek out another professional opinion if you have any doubts.
For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s newest white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.