Protect your nest egg, Alberta Securities Commission warns people 55 and older

The Alberta Securities Commission has launched a quiz to help warn those 55 and over to be wary of fraudulent investment schemes perpetrated by people they know.

Those nearing retirement become targets for investment schemes and fraud by people they know

Rachel Ward · CBC News · Posted: Jun 25, 2018 1:31 PM EDT | Last Updated: June 25, 2018

Marnie Harris says she can see how people would feel pressured to put money in a fraudulent scheme. (Nelly Albérola/Radio-Canada)

The Alberta Securities Commission has launched a quiz to help warn people ages 55 and older to be wary of fraudulent investment schemes perpetrated by people they know.

The online quiz, How Safe is Your Nest Egg, runs through questions to identify your danger level and offers tips to help educate people who may be at risk.

The commission recently hired Innovative Research Group to survey Albertans for signs they're vulnerable to "affinity fraud," which is fraud committed by anyone you know, like a friend, family member or even someone from church or the community. It's often related to financial investments.

"They kind of take your trust and use it against you and then take your money and invest into a fraudulent scam," said the commission's Ceilidh McMeekin. "And most frequently the funds from those scams aren't recovered."

Ceilidh McMeekin is with the Alberta Securities Commission, a provincial regulatory agency. (Nelly Albérola/Radio-Canada)

The survey found that of all Albertans, four in 10 rely on people they know for financial advice and don't research their investments. For ages 55 and higher, only 42 per cent of women and 65 per cent of men research their investments.

Sixteen per cent have experienced at least one type of affinity financial abuse or fraudulent investment, which may include being pressured to give money to family.

'Double-edged blade'

The commission believes this age group is more susceptible to affinity scams, not because they're naive but because the generation shares a common value of trust. This age group can be very trusting of people in their lives and, according to the study, more than half don't talk to friends or family about finances — a big warning sign that abuse could go unnoticed by loved ones.

There's also a perception that people nearing retirement or in retirement have amassed wealth and have a nest egg, such as money in a bank account or their home.

"It's kind of a double-edged blade," McMeekin said. "We really want people to kind of take step back and let go of being afraid of being rude by asking questions and kind of drill a little bit deeper before they decide what to do with their money."

Marnie Harris, 68, attended a commission event on the weekend and said the message resonated with her. She's very active, thanks in large part to her four grandchildren, and considers herself knowledgeable and careful with finances.

But she has people in her life — well-educated and retired from successful careers — who have paid large sums to such schemes because they panicked and trusted what they were being told.

"Nobody wants to talk about it or admit it, so yeah, I think we better make them aware," Harris said. "I'd be more than happy to lead the team. I was really angry."

The Alberta Securities Commission is encouraging people to:

Monitor your finances for unusual activity.
Question carefully anyone with access to or interest in your money.
Check the registration and discipline history of your investment advisers.
Do your own investment research.
Make use of tools on the commission's website, such as calculators and financial literature.

The commission's investor index research was conducted by Innovative Research Group between May 11 and 18. It surveyed 1,599 people living in Alberta, including 750 people aged 55 or older.