Marietta’s Tips to Avoid Fraud on CBS 58
Good due diligence is going to be the antidote to fraud…the more questions you ask, the better.
Marietta’s Portfolio Manager and Partner, Mary Allmon, was featured on CBS 58 discussing the importance of protecting yourself when working with an investment advisor. Following a recent Ponzi scheme committed in the Madison, Wisconsin area, CBS 58’s Brittany Lewis sought out Mary to provide viewers with guidance for avoiding investment fraud.
As an Independent Registered Investment Advisor of 20 years, Marietta takes due diligence and client security very seriously. We have compiled the guide below to offer recommendations on how to avoid fraud.
1.) What do people need to be cautious of when investing?
Watch out for Red Flags:
- Anything that sounds too good to be true.
- Any investment professional or product that guarantees returns. Also, high returns with little or no risk.
- Overly consistent returns. Investments go up and down over time. Be skeptical about any investment that regularly generates returns regardless of market conditions.
- Pressure to invest quickly.
- Unsolicited offers, cold calls, newsletters, ads that might come as a direct mailer or online through a banner add or social media.
- Persuasion tactics like seminars or sales pitches that offer free lunches targeted at specific groups.
2.) How can people protect themselves from becoming victims of an investment fraud scheme?
- Register your investment accounts in your name with an independent third-party custodian that is monitored by regulatory agencies. All transactions in your account should be fully visible to you daily either through account statements or the custodian’s website/app.
- Ask questions. Due diligence is the antidote to fraud. Thoroughly evaluate the background of any investment advisor or broker before you invest. A good investment professional will welcome questions and have informed answers.
3.) How can investors tell that the account statements they are receiving are real and not fictitious?
- Cross-check your statements. If you are using an independent third-party custodian, there should be at least two sets of statements, one from your advisor and one from the custodian. Watch for transactions that do not appear on the brokerage statement or if there are frequent transactions you don’t understand or don’t add up.
- Check the financial institution name and logo on the statement. Look at the contact info on the statement and check for discrepancies.
- Try to avoid commingled and/or pooled funds where the manager has custody and possession and/or the account activity statements are generated by only the manager and not by an independent third-party.
- Carefully review the contract used when signing up with an investment professional. Watch for misspellings, careless wording, or vague language. Consider having an outside professional review the contract before signing.
4.) What are some other documents people should ask for when investing?
- For advisors: Firm registrations with regulatory authorities, ethics policies, information and cyber security policies, and sample statements.
- For investment products: A prospectus or disclosure statement.
5.) What are some “tough questions” investors should be asking when investing money?
Marietta Attends SecureFutures Investment Conference
Marietta Welcomes Jonathan Smucker To Partnership
Marietta is thrilled to announce Jonathan Smucker as the firm’s newest partner. He joins John Evans, Lori Brook, and Mary Allmon on the partnership team. Jonathan has worked assiduously for Marietta since February 2011, contributing in operations, client service, research, and portfolio management. His focus on the U.S. economy and financial markets has been highly valuable, illustrated by Marietta’s U.S. Equity Strategy winning a “Top Gun status” within Informa Investment Solutions’ PSN manager ranking database for the third quarter of 2017. Beyond investments, Jonathan brings a business acumen into the fold. Last March, he completed his MBA from the University of Chicago Booth School of Business. Though his contributions are applauded, Jonathan’s colleagues appreciate most his congeniality and positivity.
Marietta Attends Schwab IMPACT Conference
Last week, three members of Marietta attended the annual Schwab IMPACT Conference for registered investment advisors in Chicago. Amanda Grams, Mary Allmon, and Jonathan Smucker connected with dozens of firms, specialists, and speakers, highlighted by former UK Prime Minister David Cameron’s keynote address. While the conference offered insights on a variety of topics, one theme dominated throughout most sessions: the client experience should be the focus of every firm.
A core mission at Marietta has always been to put our clients first. Thus, we are encouraged by this emphasis at IMPACT and we are dedicated to exploring more ways to improve our client relationships. In the coming months, a member of our team will be reaching out to you to listen to suggestions and observations on how we can provide you with the best possible experience with Marietta.
We thank our clients for their loyalty and friendship and we extend to you all our wish for a joyful and healthy holiday season.
Milwaukee Journal Sentinel Features Marietta Portfolio Manager
Marietta’s investment strategy often relies on broad economic themes that will push growth in specific regions, sectors, and industries. We explore stocks which will benefit from these trends and invest in the companies that have demonstrated an ability to consistently execute their business plans and grow earnings. Portfolio Manager, Mary Allmon, shared one of these themes that we are excited about with the Milwaukee Journal Sentinel’s Kathleen Gallagher this past Sunday. To read the article, please follow the link below:
John Evans named “Five Star Wealth Manager”
Marietta is pleased to announce that John Evans has been named a “Five Star Wealth Manager” for the 4th year in a row. Each year, Milwaukee Magazine partners with Five Star Professional – a market research firm – to publish a list of wealth managers who meet an objective set of criteria. The list is intended to assist individuals in selecting a service professional that other investors have indicated provides exceptional client satisfaction and service.
At Marietta, we take great pride in providing the best possible service to our clients. We are delighted to receive this recognition and look forward to continuing to serve you in the future.
Marietta Celebrates 15th Anniversary
February 7, 2015 marked the 15th anniversary of the founding of Marietta. Looking back over these years, we are especially grateful for the loyalty and support of our clients. At a gathering of the firm’s members to commemorate this anniversary, Managing Partner, John Evans provided an optimistic forecast for global markets and stated that “Marietta is now stronger and has a brighter future than at any time in its history.” As we confront the opportunities and challenges of the future, we rededicate ourselves to Marietta’s Mission: “to provide the highest quality client service.”
To all of our clients, we say thank you!
Marietta Attends University of Chicago Booth’s Economic Outlook 2015
On January 15, 2015, current Booth MBA student, Jonathan Smucker, and colleague, Mary Allmon attended the University of Chicago Booth’s Economic Outlook 2015. The presenters were dynamic speakers with impressive resumes:
- Austan Goolsbee, University of Chicago economics professor and economic advisor to the Federal Reserve Bank of New York, and former cabinet member
- Randall Kroszner, University of Chicago economics professor and former Federal Reserve Governor
- Carl Tannenbaum, Senior Vice President and Chief Economist at the Northern Trust
The presenters collectively agreed that 2015 would be a year of slightly faster U.S. GDP growth, that European policy makers must act in order to fight deflation, and that India is on the right track. These statements are all consistent with Marietta’s 2015 Outlook. The presenters also agreed that the recent plunge in the price of oil was unexpected, but was a net positive to the economies of oil importers, the US included. They did not necessarily agree on the causes of the drastic price move: Goolsbee cited slowing demand in China while Tannenbaum mentioned geopolitical games being played within OPEC. Tannenbaum echoed a statement similar to Marietta’s Dec. 4 Oil Blog “Oil Spills: Winners and Losers” that while US oil production growth will slow in the short term, it is unlikely to be permanently damaged. The speakers also agreed that the Fed was likely to raise interest rates in the second half of the year, with fall being the median prediction.
Journal Sentinel Features Marietta Portfolio Manager
Marietta’s investment strategy often relies on broad economic themes that will push growth in specific regions, sectors, and industries. We explore stocks which will benefit from these trends and invest in the companies that have demonstrated an ability to consistently execute their business plans and grow earnings. Associate Portfolio Manager Robert Draper shared one of these themes that we are excited about with the Milwaukee Journal-Sentinel’s Kathleen Gallagher this past Sunday. To read the article, please follow the link below:
Good Reading: Too Big To Fail
Good reading: Too Big To Fail: How Wall Street and Washington Fought to Save the Financial System and Themselves by Andrew Sorkin (Viking, 2009) 544 pp.
Four years have passed since the collapse of Bear Stearns, which ushered in twelve months of economic recession and financial market upheaval. To historians of the economic history of the United States and its financial markets, the importance of this period is rivaled only by the Crash of ’29 and the Great Depression. The causes and consequences of the 2008-09 crisis will be debated and continue to be controversial for decades to come, but the definitive narrative will likely remain Sorkin’s Too Big To Fail. In 544 pages of gripping day-by-day description of the major participants and developments, Sorkin admirably captures the pulse of Wall Street and Washington during these unforgettable months. The passage of four years provides a fresh perspective for a re-read of this to-be classic, and the book should be required reading for young professionals entering the investment industry.
The most dramatic and historic events of this chaotic year occurred in September of 2008. In less than 30 days, the financial landscape was forever altered. Mortgage giants Fannie Mae and Freddie Mac were taken over by the government. Lehman Brothers filed for bankruptcy. Merrill Lynch was sold to Bank of America in an eleventh-hour rescue. American International Group, the largest insurance company in the U.S., was put on government life support. Morgan Stanley and Goldman Sachs, in a desperate effort to avoid a similar fate, rushed to become bank holding companies thereby gaining unlimited access to the Federal Reserve’s discount window. The failure of Reserve Primary Fund triggered a panic run on money-market funds that threatened to disrupt the entire financial industry. The Dow Jones Industrials commenced a plunge with unprecedented volatility that by March of 2009 measured 50%.
Sorkin’s narrative centers on the indefatigable and at times frantic efforts of Treasury Secretary Paulson, Fed Chairman Bernanke, and New York Fed head Geithner to steer the financial system through this perfect storm. As they were painfully aware, their actions constituted the biggest intrusion of the U.S. government into free-market capitalism in the country’s history. For this they were and continue to be condemned by many politicians and market commentators. Their defense is that their actions were necessary to prevent financial and economic Armageddon. Bernanke stated in a critical meeting with skeptical congressional leaders: “I spent my career as an academic studying great depression. I can tell you from history that if we don’t act in a big way, you can expect another great depression, and this time it is going to be far, far worse.” In an oval office meeting with President Bush, Paulson said: “If we don’t act boldly, Mr. President, we could be in a depression deeper than the Great Depression.” Sorkin sides with Bernanke and Paulson: “To be sure, if the government had stood aside and done nothing as a parade of financial giants filed for bankruptcy, the result would have been a market cataclysm far worse than the one that actually took place.”
If Paulson, Bernanke, and Geithner were driven by a determination to save the U.S. economy, the heads of the major Wall Street firms and U.S. Banks were motivated by less lofty considerations. These titans of American finance worshipped at the altar of personal status, money, and power. On occasion they expressed concern for their shareholders and employees, but there is no mention of a desire to protect the public good. An example occurred in October, when the CEO’s of the 9 major firms were summoned by Paulson, Bernanke, and Geithner to a make-or-break meeting to approve an injection of taxpayer money into the financial system as a desperate step to restore stability. With tens of millions of American jobs at stake, the initial reaction of Merrill-Lynch CEO John Thain was to complain that such a step might result in changes in Wall Street executive compensation policies.
In an insightful epilogue penned in 2009, Sorkin offered the sober conclusion that the big Wall Street firms and banks remained too big to fail. He asserted further that ego, greed, and a “vulture capitalism” that abuses clients, which were a major ingredient in fomenting the turmoil, were still salient characteristics of Wall Street. Nevertheless, much has changed since the years and months leading up to 2008, and the likelihood of a similar financial upheaval is now remote. The overheated housing market and abuses in the mortgage industry, which precipitated the crisis, now seem to be a unique phenomenon of the past. The banks and investment firms are much better capitalized, much more sensitive to risk, and far more heavily regulated. The government has also learned from the experience, and is far more vigilant and better equipped to identify and respond to excesses before they imperil the entire financial structure. In retrospect, the cataclysm of 2008-09 created widespread economic suffering for millions of Americans, but it also provided a beneficial wake-up call. Sorkin’s book will be a reminder to generations to come of how perilous the situation was and thereby serve as a deterrent to a future crisis.