Assessing Your Risk: Are You Vulnerable to Investment Scams?

Investment scams are nothing new but there are some tools that you can use to assess your vulnerability to falling for one. FINRA (Financial Industry Regulatory Authority) has created two simple quizzes you can take so let’s explore how you can use them to better understand your own risk—and ultimately safeguard your financial future.

The FINRA Risk Meter: Assessing Your Vulnerability

The first step in scam prevention is knowing your own tendencies when it comes to investments. That’s what the FINRA Risk Meter is all about. It’s designed to help you identify behaviors and attitudes that could make you more susceptible to fraudulent investment schemes.

The Risk Meter examines factors such as your willingness to take unsolicited advice, chase after high returns, or trust investments that promise a guaranteed outcome. By answering a few key questions, you’ll get a personalized snapshot of where you stand in terms of risk.

Understanding your risk level helps you make better financial decisions. For example, if the Risk Meter shows you’re prone to trusting high-pressure sales tactics, you can take a step back and reevaluate offers with more skepticism. Simply being aware of your own vulnerabilities can empower you to avoid making rash decisions.

Take the Risk Meter Quiz: Click here to assess your own risk level now.

The Scam Meter: Is This Offer Too Good to Be True?

Once you have a handle on your personal risk, the next logical step is to evaluate any specific investment offers that come your way. That’s where the Scam Meter comes in. This tool is designed to help you assess whether an investment opportunity you’re considering might actually be a scam.

The Scam Meter asks targeted questions about the investment—whether the offer seems too good to be true, whether you’re being pressured to act quickly, or if something just feels off.

The Scam Meter highlights red flags, like promises of guaranteed returns with no risk. If a deal seems too perfect, the Scam Meter will help you spot the warning signs of fraud.

Use the Scam Meter Quiz: Click here to evaluate your next investment opportunity before you commit.

Common Red Flags to Watch Out For

Investment scams can take many forms, but they tend to share some common characteristics. Here are a few red flags that you should always be on the lookout for:

1. Guaranteed High Returns – Any promise of ‘guaranteed’ returns, especially at high rates, should raise an immediate red flag. There’s no such thing as a risk-free investment.
2. Pressure to Act Quickly – Scammers often create a false sense of urgency to push you into a decision before you’ve had time to think.
3. Complex or Confusing Explanations – If the person pitching the investment can’t clearly explain how it works or if it’s loaded with financial jargon that doesn’t make sense, that’s a sign to be cautious.

Protecting Yourself: Practical Steps

How can you protect yourself moving forward? Don’t rely solely on what the seller tells you. Research the investment, read reviews, and trust your instincts. If something feels off, it probably is. Don’t be afraid to walk away, even if you’re under pressure to act quickly.

When it comes to investment scams, awareness is your best defense. By using tools like the FINRA Risk Meter and Scam Meter, you can better understand your risk profile and spot potential scams before they wreak havoc on your financial well-being. No matter how knowledgeable you are, anyone can fall victim to a scam. But by staying informed and taking proactive steps to assess your risk, you can protect yourself and your hard-earned money.