Toucan Talk
Avoiding a Financial Scam
Provided by Michael Oana mjo@teamoana.com

Michael Oana is the Chief Investment Officer with Team Oana Investment Advisors. Team Oana is a locally owned boutique investment firm specializing in helping conservative investors. Mr. Oana's Toucan Talk column appears bi- weekly in The Columbia Star.

In the wake of the most recent South Carolina Financial Scams, I think that it is important to review the basics of how not to get ripped off when it comes to making an investment. We have all read about several large scams that involved investment firms operating in our state. I can think of four that happened in just the last year. As the chief investment advisor for a locally owned boutique investment firm, we work with our clients to protect their portfolios from these scams. Here are some basic ideas on how not to get ripped off:

Investigate: Always do your homework when it comes to working with an investment company or salesman. If the investment sounds too good to be true, it most likely is. The higher the risk, the higher the return; most of the recent scams offered "higher than normal returns with no or little risk". Make sure to read the paperwork, check and see if the investment comes with a prospectus. Make 100% sure that you know all the facts before you invest.

Compliance: Check the individual offering, the investment. Are they state or federally registered? The laws are complex and a limited amount of financial salespeople might not have to be registered. Most of the account problems occurred through sales people that were not registered. If you are not sure, check with the South Carolina Secretary of State. You can also call the Federal Agency, the Securities and Exchange Commission, or you can check with the National Association of Securities Dealers. You may even be able to check with the New York Stock Exchange. Most advisors are generally members or overseen by one of the above.

Relationship: Get to know the salesperson. How long have they been selling investments? Ask them to put their track record in writing or check their background.

Diversify: Most non government backed investments, if not all, have some form of risk. Before investing, understand the risks of the investment that you are considering. Can you lose just the investment? Can you lose your principal? Make sure to diversify your portfolio with a number of investments. Never put all of your eggs in one basket. Monitor: Most investments, especially ones sold through a prospectus or with government oversight are required to produce a statement. Make 100% sure before you invest that you know that you will get updates. Some firms offer web based tracking so you can monitor your account and portfolio 24/7. If the investment heads south, this will give you the ability to keep a better eye on things. Contact the sales agent if the statement is not correct or it shows large drops.

Second Opinion: Before you make a large investment, shop around. Talk with several advisors at several companies. If it sounds too good to be true, another set of eyes could pinpoint the extra risk. You may want to let your attorney or CPA check the investment.

Fees: Lastly, make sure to have an understanding of the fees involved. Most, if not all, will have a prospectus on fee schedules. Check and see if they offer an exchange provision. If you are not happy in the future, can they be easily sold or traded? Are they flexible and can they be transferred to another broker? Most good advisors will disclose the fees in advance. Also make sure that you understand what type of agent you are working with. Are they a stock broker, financial advisor, fee based planner, or a registered sales person? Consider having them put all fees in writing.

Again, making an investment can be a rewarding process. Follow the above tips and they should help avoid some of the recent scams.

Team Oana Investment Advisors,Inc.,

is an independent company with securities

offered through Summit

Brokerage Services,Inc.Member NASD

& SIPC.