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Information on Investment Fraud

Author: zamansky   |   Latest post: Fri, 4 Jun 2021, 3:12 PM

 

Investing with an App? What You Need to Know

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If you are investing with an app, or if you are thinking about investing with an app, you are not alone. Commercials and search engine advertisements that promise lower fees and “investing made simple” are understandably intriguing, and why wouldn’t you use an app that lets you get started in minutes instead of taking the time to meet in person with potential investment advisors?

Undoubtedly, using an investment app can be a reasonable option for some investors. If you do your research, make sure you clearly understand the terms and conditions that apply, and have the ability to understand your investment options and make prudent investment decisions, using an app might be right for you. But, before you entrust your nest egg and financial future to a computer program, here are some questions you might want to keep in mind:

1. Is the app trustworthy?
Not all investment apps are created equal. From investing algorithms to security protocols and terms of service, the apps that are currently on the market differ in a number of important ways. How sure can you be that your account is secure? Will any of your information be shared with third parties (which could make you a target for investment scams)? What steps are involved in withdrawing funds and closing your account?

2. Will you have access to a live advisor?
When investing with an app, it can still be helpful to receive professional advice. If having access to an advisor is important to you, this is something you will want to consider when choosing between app alternatives. You should also make sure that any advisors associated with the app are registered with the Financial Industry Regulatory Authority (FINRA) or the Securities and Exchange Commission (SEC).

3. How much information does the app provide?
Having 24/7 access to your account information should be a given, but investment apps should be transparent with other types of information as well. What type of investment strategy does it assign to your portfolio? How and when does it make investment decisions? What level of customization is available? Can the app freeze your account in the face of volatility?

4. What are the fees?
Another key piece of information you should have as an investor is the full fee schedule that applies to your account and any transactions affecting your portfolio. How does the app make money? Are you charged on a monthly or per-transaction basis (or both)? Can your fees change over time?

5. Does the app promote sponsored investments?
Some investment apps make money by promoting specific investment opportunities and making referrals. When the app provides investment “advice,” is this advice unbiased? Or, could it be recommending unsuitable investments with its parent company’s financial interests in mind?

​Have a National Investment Fraud Law Firm on Your Side
If you are concerned about investment fraud and would like to discuss your situation, contact an attorney online for a free consultation.
 

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