Secretary of State Connie Lawson is warning Hoosier investors to exercise caution when approaching two financial investment trends spreading across the county: cross-selling and robo-advisers.
Both are legal practices that can quickly backfire for investors if precautions are not taken.
Cross-selling by banks and investment firms is a growing concern for securities regulators.
At its best, this is a way for banks or investment firms to inform clients about the range of financial products and services available. At its worst, this common sales technique can take advantage of loyal clients, misleading them into acting against their best interests.
Additionally, investors are increasingly turning to robo-advisers to help them manage their portfolios.
Easy-to-use smartphone apps and online portals make setting up an account with a robo-adviser convenient and quick, which is contributing to their increasing popularity. However, using robo-advisers may yield unexpectedand undesired results. They are relatively new to the investing landscape and securities regulators are still working to understand the full implications of this technology.
No investments are risk-free, no matter the technology used or the sales pitch made.
Before making any financial decisions, Lawson advides doing some homework and calling the Secretary of State’s office at (317) 232-6681, or visit www.in.gov/sos/indianamoneywise.
The full investor advisories are available at www.nasaa.org.