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10 self-defence tips to protect your retirement nestegg

by Wayne Cheveldayoff, 2005-08-11

Before you invest, think self-defence.

That’s the message from the North American Securities Administrators Association (NASAA), which has developed 10 self-defence tips for investors, including “don’t be a courtesy victim,” something Canadians in particular may be prone to.

The tips are published on NASAA’s website ( in a special resource site for seniors because the group believes older investors “are a top target for con artists.”

But the tips will benefit anyone of any age venturing beyond a bank savings account or Canada Savings Bond.

NASAA, which is made up of U.S. state and Canadian provincial regulators, reports that regulator files “are filled with tragic examples of senior investors who have been cheated out of savings, windfall insurance payments, and even the equity in their own homes.”

Here are NASAA’s 10 self-defence tips to protect your nestegg.

1. Don’t be a courtesy victim. Con artists will not hesitate to exploit your good manners. Save your good manners for friends and family, not strangers looking for a quick buck.
2. Check out strangers touting strange deals. Trusting strangers is a mistake anyone can make. Say “no” to any investment professional who presses you for an immediate decision. Take time to check things out.
3. Always stay in charge of your money. Beware of anyone who suggests investing your money into something you don’t understand or who urges that you leave everything in his or her hands.
4. Don’t judge a book by its cover. Successful con artists sound and look extremely professional and have the ability to make even the flimsiest investment deal sound as safe and sound as putting money in the bank.
5. Watch out for salespeople (investment advisors) who prey on your fears. Con artists know that you worry about either outliving your savings or seeing all of your financial resources vanish overnight. Fear can cloud your good judgment.
6. Don’t make a tragedy worse with rash financial decisions. The death or hospitalization of a spouse has many sad consequences – financial fraud shouldn’t be one of them. If you find yourself suddenly in charge of your own finances, get the facts before you make any decisions.
7. Monitor your investments and ask tough questions. Don’t compound the mistake of trusting an unscrupulous investment professional or outright con artist by failing to keep an eye on the progress of your investment. Insist on regular written reports. Look for signs of excessive or unauthorized trading of your funds. Don’t let a false sense of friendship or trust keep you from demanding a routine statement of your accounts.
8. Look for trouble retrieving your principal or cashing out profits. If a stockbroker, financial planner or other individual with whom you have invested stalls you when you want to pull out your principal or profits, you have uncovered someone who wants to cheat you. Some kinds of investments have certain periods when you cannot withdraw your funds but you must be made aware of these before you invest.
9. Don’t let embarrassment or fear keep you from reporting investment fraud or abuse. Con artists know that you might hesitate to report that you have been victimized in financial schemes out of embarrassment or fear. Every day that you delay is one more day that the con artist is spending your money and finding new victims.
10. Beware of “reload” scams. If you are already the victim of an investment scam, don’t compound the damage by letting con artists “reload” and take a “second bite” of your assets. Faced with a lost of funds, some seniors who have been victimized once will go along with another scheme in which the con artists promise to make good on the original funds lost. Though the desire to make up lost financial ground is understandable, all too often the result is that you lose whatever savings you had left in the wake of the initial scam.

One last thing: Circulate this list to everyone you care about. As NASAA puts it, “Arm yourself with information and your confidence will send con men (or women) running.”

Wayne Cheveldayoff is a former investment advisor and professional financial planner. He is currently specializing in financial communications and investor relations at Wertheim + Co. in Toronto. His columns are archived at and he can be contacted at

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©2005 Wayne Cheveldayoff