Ready to invest in the share market? Great Decision!
But wait, have you checked the legitimacy and authenticity of the investment company?
Wondering why this is important? Well, all because of rising investment scams in the country. And do you know how these scams often start?
With one wrong choice of company!
Yes, it is true!
So, before deciding which company to invest in, dedicate some of your time to choosing the right investment company.
5 Tips for Investment Scams Protection
We know that a lot of questions would be running in your mind of how do I know if an investment company is legitimate?
Aware of this challenge, we are here with the solution, A Checklist.
Whether you are going to choose a stockbroker, an Investment Advisor or a Research Analyst keep this list handy to find the reliable company to begin your investment journey.
- Check for the Regulatory Registration
The first and foremost step is to check for the registration of the company. In India, all the stock brokers, research analysts, and investment advisors are registered with SEBI.
You can check for their registration details simply by visiting the SEBI’s website.
However, if you can’t find such details on the website, that is the biggest red flag and time to step back.
If you are looking for an algo-trading company, you can check for its certification details on the NSE website. If a company refuses to share this information with you, consider it a clear signal to remove them from your list of potential options.
- Look for Their Transparency
The next step is to check how the company shares its details with the client. This includes their operations, fees, etc.
In the case of advisory services, check how the advisor shares his strategies with you and guide you with the risk management part. In case, the company’s information is not completely available you can ask questions.
However, if you find any of the answers vague or notice manipulation in their responses it’s time to remove them from the list.
A legitimate company always shares complete information and maintains transparency in its products and services.
- Beware of Unrealistic Promises
It is always good to be away from promises that seem too good to be true.
Even if the company is registered, but selling dreams by displaying guaranteed returns and fake promises then it is time for you to get alert.
Always remember that every investment comes with a risk. A legitimate company is upfront about the risks involved in investing and trading.
- Ask Questions
Ask every and any question that hits your mind before taking an investment service. Good and legitimate companies welcome inquiries and feel happy to answer their client’s doubts.
If your chosen company tries to escape or provide defensive answers to your questions, it is the signal for you and the time to reconsider your option.
- Avoid Cold Calls
Last but not least, avoid responding to cold calls, especially from companies you have never heard of.
Most of the investment scams begin with one call inviting you to join FREE Webinars. It is their way to trap you in their unrealistic and fake investment schemes that end up in losses.
Beware of the high-pressure tactics that they usually use to convince traders and investors. If you ever encounter such calls, that is enough for you to identify investment scams.
Conclusion
Consider the above tips seriously to get an answer to- ‘How do I know if an investment company is legitimate?’
By doing your homework and understanding how do investment scams work, you can help protect yourself from scams and make informed decisions about your investments.
Remember, when in doubt, ask questions, seek advice, and take your time. Your financial future is worth it!
