I try to follow themes in my blogging - this month was going to be all about new years resolutions and getting your finances in order. Budgeting. Saving. Financial planning. Then the Divorce Fair happened. Suddenly my writing and research made an unexpected turn. (For the record, I love when that happens.)
Tonight and tomorrow morning I will be exhibiting and presenting at the Divorce Fair - hosted by the Legal Information Society of Nova Scotia. I’ve gotten a wide variety of reactions to this. Surprise, amusement, even disgust (mostly from those who refuse to accept the fact that approximately 40% of Canadian couples will divorce).
Divorce is a stressful and painful time. It is a highly emotional process. You may be heartbroken. You may be angry. Your finances are likely the list thing you’ll want to think about - but they may be among the most important issues to focus on. It is extremely important to plan for your divorce. This is the message behind the Divorce Fair.
When most people talk about divorce, aside from custody issues, money is usually top of mind. Who got what, how much, and why? The division of money and assets is a major sticking point in many divorce proceedings. How do you prepare yourself for this? There are a few simple tips:
- 1. Know what you own (and owe). Make a list of your bank accounts, investment accounts, property and other assets you and your spouse own.
- 2. Gather the paperwork. Make copies of your financial papers: account statements, tax assessments, mortgage contracts, insurance policies, etc.
- 3. Be prepared for the costs of the divorce itself. If you are considering a divorce, be prepared and stash money away now to cover lawyers fees, alternate living arrangements, and other costs that may come up.
The other and significantly less known financial risk associated with a divorce or separation is financial fraud. To understand the link, let me remind you of the stress and emotional upheaval that comes with the divorce process. You are struggling to adjust to new financial realities, and in many cases you are managing your finances on your own for the first time, and making decisions you’ve never had to make before.
Sadly, no one is more aware of this than a con artist.
Results from last year’s CSA Investor Index indicated that almost half (46%) of investment fraud attempts were made to people undergoing major lifestyle changes - which included job losses, the death of a loved one, and divorce or separation.
The key to avoiding fraud is to be aware of your vulnerability and know the warning signs. Before you invest, educate yourself on investing basics to make smarter, safer choices, and learn to recognize the red flags of fraud before you become a victim.
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In the recently released CSA Investor Index 2009, 41% of Nova Scotians reported that they were approached with a possibly fraudulent investment. One out of four said they were approached five or more times with a potential investment fraud.
With fraud attempts so prevalent, how can you work to protect yourself? To start, you want to be familiar with the Red Flags of Fraud – five signs that an investment opportunity might be fraudulent or inappropriate.
To help investors become more familiar with the signs of fraud, and more comfortable in their investment decisions, my colleagues at the Alberta and BC securities commissions have combined forces to provide an online tool to help you learn how to protect your money.
The interactive tool entitled Investment Scams: How to Protect Your Money, focuses on some common methods that fraudsters use to approach potential victims – via friend and family or ‘affinity’, the Internet, seminars and advertisements. The online resource engages users with an opening quiz and testimonials to raise awareness of the ways fraudsters attract their victims. The testimonials are based on real cases depicting how people are drawn into scams.
The comprehensive tool provides information about how to recognize, research and prevent fraud. Offered as modules that can be easily accessed and shared, the resource provides investors with checklists and tips to help them evaluate and research investment opportunities for risks and potential fraud. As well, there are features within the resource to help investors directly email questions to a person offering them an investment and submit a complaint to the securities regulators.
To try it out for yourself, visit the site of either the Alberta or British Columbia Securities Commissions. Some of the information presented will be specific to those provinces. To see how the same might apply in Nova Scotia, contact me, or pose a question in the comments below.
Also available, from the Alberta Securities Commission, is a similar tool Who’s Taking Care of Your Money? This online course guides you through the process of choosing and working with a financial adviser. For both novices and experienced investors, it includes information on managing your relationship with your adviser, and how to file a complaint if needed.
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