When looking for investment opportunities, it’s natural to want those with greater returns. It’s a smart financial decision. Unfortunately, some brokers use this to lure investors into bad investments.
Here is how it happens:
They promise enticing returns
You need to be extra careful when a broker is promising spectacular returns that other opportunities won’t offer. They commonly use enticing words, such as “guaranteed” and “risk-free.”
While some investment options are considered lower risk than others, guaranteed returns and risk-free investments are unrealistic. You and the broker can’t tell what will happen in the future that might affect your investment.
A broker who wants to hide their deceit may also ignore discussing the risks associated with an investment when you ask questions. They may reiterate how it’s risk-free and return to focusing on potential gains.
They pressure you into investing
High-pressure sales tactics are mostly used by brokers who do not have your best interests. If a broker tells you that a deal is only available for a limited time, take a step back to think clearly. This is because they may be manipulating your emotions to rush you into quick decisions, and, in most cases, the depicted sense of urgency or scarcity is usually false. A broker may make you feel guilty for not wanting to act quickly.
Some brokers use aggressive sales pitches, emphasizing how you will be negatively impacted if you don’t invest. This can potentially cause you to skip obtaining more information about the opportunity since you don’t want to miss out.
The “phantom riches” is a common tactic that some brokers use to take advantage of unsuspecting investors. If you have experienced any form of investment fraud, legal guidance can help you with investigations to uncover the fraudulent activity.
