What everyone needs to know over 50
By Debra G. Speyer
Debra G. Speyer advices seniors to be aware of warning signs that their brokerage account is being mismanaged. Research shows1 retirees and pre-retirees are most at risk for being victims of securities fraud or broker misconduct. Speyer provides the following tips to keep your investments, retirement accounts and 401k funds safe:
- Speyer’s number one tip is to review your monthly statements carefully. She is always stunned when clients tell her they file them away without even a glance.
- After the review, ask questions. Don’t stop asking until you understand the answer and the rationale completely. We all hate seeming stupid or uninformed but it’s your money. Protect it because you’ve no way to replenish a nest egg earned over a lifetime, Speyer advices.
- Become knowledgeable about the investments in your account. There’s no excuse for not double-check a complicated investment – there are so many available resources: the library, internet, a friend or relative with investment experience.
- Workers are usually faced with a critical choice regarding their pension: taking a lump sum payout or monthly distribution. Speyer says, “Beware of financial advisors who recommend taking a lump sum while promising your principal will be maintained.” There are many factors that have to be examined before making the choice between those two choices. With a lump sum distribution, if the stock market goes against you, you may indeed have to invade principal to pay monthly expenses. Over time, doing this reduces the amount of your pension’s value. Speyer warns, “Retirees should know the risks of taking a lump sum pension, and know that no one can ever promise that principal with be maintained.”
- Reward follows risk. The higher the return on any investment, the more risk associated with that investment. Do you know your risk tolerance? And can you pay immediate bills if it goes against you?
- If your goal is safe, low risk investments and you see a high-risk purchase, Speyer advises contacting branch manager immediately.
- Do not trade in your annuity for a similar one without knowing the surrender charges, yearly fees charged by the annuity company and the commission your
broker makes and most importantly, the reason for the change. Then think carefully about whether it makes sense. Annuities carry high commissions and surrender fees. There may be no advantage to you to switch.
- Speyer urges to follow the adage “be diversified” meaning to invest in different asset classes and industries to reduce overall risk and to avoid damaging performance by the poor performance of a single security, industry or country.
Speyer says, “Make sure your investment advisor is focused on your retirement, not theirs.” Make sure the broker takes into account investments that are suitable for your age as well as your circumstances. “If your broker didn’t take your personal suitability to purchase certain investments into account, you may have a case against their firm,” says Speyer.
Speyer Law helps individuals and pension funds recover money from brokerage firms and investment advisors who sold questionable or unsuitable investments.
If you wish to discuss your particular situation, please contact Debra Speyer at Speyer Law at 800-510-7862 or visit www.speyerlaw.com. She has been quoted in over 250 periodicals and is a legal commentator for radio and television including CNN, NBC, Fox News and The Wall Street Journal Radio. She is an adjunct law professor at Drexel University, Philadelphia. Speyer Law is a national law firm handling securities law, elder law and estate matters.
- A Study on Elder Financial Abuse Prevention, MetLife Mature Market Institute, National Committee for the Prevention of Elder Abuse and the Center for Gerontology at Virginia Polytechnic Institute and State University, March 2009
About Debra G. Speyer:
Debra Speyer is a securities litigator with a national securities law practice and an estate planning/elder law practice. Before going into private practice in 1990, Debra was an attorney with Financial Industry Regulatory Authority (Finra) prosecuting brokers due to regulatory violations or investment fraud.
She is listed in Philadelphia Magazine’s Best Lawyers for her work handling securities fraud and elder law matters. She is also listed in Who’s Who in American Law and Who’s Who in America. She was honored by the National Organization of Women Business Owners with their “Women Making History” award.
Debra has been quoted in over 250 periodicals throughout the world and is a legal commentator for radio and television such as CNN, NBC, Fox News and The Wall Street Journal Radio. Debra’s awards include Who’s Who in American Law, Who’s Who in America, NAWBO’s Women Making History Award, and Arrive Magazine’s Women to Watch. She is a member of the Pennsylvania, New York, Maryland, D.C., and Florida Bars.
Debra Speyer is also a Professor at Drexel Law School. Speyer Law specializes in securities litigation, elder law and estate planning & probate.