Don’t Walk Like a Duck: 3 Steps Advisors Can Take to Not Sound Like a Scam

Avoid the trendy discussions of passive income that seem to permeate social media and YouTube, since passive income is a common denominator for both Ponzi and pyramid schemes.

You know the old adage, if it walks like a duck, talks like a duck and swims like a duck, it’s probably a duck? That theory of classifying the unknown into the known applies to more than just waterfowl. Many consumers rely on comparison when determining if someone in the service industry is too good to be true. With recession a looming possibility, there may be more fraudsters contacting the very people you are working on moving along your prospect pipeline. What may be worse is that fraudulent investing and advising schemes have evolved to sound more and more like legitimate businesses. With the scammers stealing marketing methods from legitimate advisors, you might be asking how can you make sure your sales and marketing pieces don’t get confused with more nefarious folks? Here are three steps advisors can do now to distinguish their marketing from fraudulent ones.

First, identify who in your office creates and sends your marketing information. Gather those people together and review all of the regulatory rules concerning soliciting business. This may be a good time to introduce them to your legal and compliance counsel and ensure that they can ask questions of them as the marketing plans progress. An atmosphere where questions are welcomed in the moment can help ensure compliance, so that your marketing stays on the right side of regulation.

Second, designate someone in that marketing team to keep an eye on government watch dogs who monitor fraud and scams.[1] Many states have ongoing lists of scams compiled by their attorney general’s office. For example, the Minnesota Office of the Attorney General provides consumers in its state with advice about how to spot and report a scam. Tips include: “Banks, government agencies, and legitimate companies only ask consumers to provide personal information in rare circumstances and don’t do so by phone, email or text message.”[2]  Additionally, several federal government agencies like Securities Exchange Commission and the Federal Trade Commission provide consumers with advice about avoiding fraud. By having your marketing team review those sites and any updates to them, you can have a clear sense of what your potential clients may be seeing from untruthful individuals. For example, advises consumers about pyramid and Ponzi schemes, two common investment frauds. The Securities Exchange Commission warns consumers to stay away from investment opportunities that promise a high return in a short time period or “pitches for exponential returns and "get rich quick" claims offer passive income or rely on recruiting others.”[3]

Other government agencies, like the Federal Trade Commission provide advice to consumers on spotting a scam that includes noting where the contact is coming from: “They use technology to change the phone number that appears on your caller ID. So the name and number you see might not be real.”[4] They also note that: “Legitimate businesses will give you time to make a decision. Anyone who pressures you to pay or give them your personal information is a scammer.”

Third, make sure your marketing plans steer clear of both the message and methods identified by those government agencies. In other words, put the advice given to consumers by government agencies to work for you. That might include avoiding asking for personal information such as asking for prospects to identify income or assets. It might also include avoiding the trendy discussions of passive income that seem to permeate social media and YouTube, since passive income is a common denominator for both Ponzi and pyramid schemes. It might also include ensuring that your phone system is set to accurately reflect your business’s current name to ensure legitimacy. Finally, while a call to action is a vital part of any marketing piece, the urgency of that call to action should be clear and avoid getting too close to pressuring clients to make decisions in the moment.

[1] Some nonprofit groups, like AARP, also report on ongoing scams.




These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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