Most common types of financial scams an individual investor should beware of?
"Affinity fraud. You see, Madoff really didn't have to sell himself, people recommended him to their friends.  In a similar way, it's easy once a scammer reels in one sucker to keep him on the hook long enough to get 10 friends to invest as well.  I've written about Mortgage Acceleration scams, and the common thread is that they are first sold to friends, relatives, neighbors. People tell their fellow church goer about it and pretty soon people's belief just takes over as they want it to work.  Edit - the scam I referenced above was the ""Money Merge Account"" and its reincarnated ""Wealth Unlimited."" It claimed to use sophisticated software to enable one to pay their mortgage in less than half the time while not changing their budget. The sellers of the product weren't able to explain how it was supposed to work, since it was nonsense anyway. You were supposed to be able to borrow against a HELOC at a rate higher than your mortgage, yet come out ahead, enough to cut the time in half or less. The link I posted above leads to a spreadsheet I wrote in a weekend, which was better at the math than their software and free. It also linked to 66 pages of accumulated writing I did over a number of months starting in 2008. In the end, I never saw any prosecution over this scam, I suppose people were too embarrassed once they realized they wasted $3500.  How can I get scammed buying S&P ETFs through Schwab? Easy, I can't." "If an offer ""is only valid right now"" and ""if you don't act immediately, it will expire"" that is almost always a scam." In the case of an investment strategy, if you don't retain custodianship over your funds, or at least determine who is the custodian, then walk away.  You should be able to get accurate account statements from a trustworthy third party at all times. If anyone offers you guaranteed better than average returns, run. They are either lying to you or to themselves. (Claiming that they will try to beat the market is more credible, but that becomes a matter of whether there is any reason to believe that they'll succeed.) If anyone sends you an unsolicited stock tip, run. They wouldn't be doing so if it wasn't an attempt to manipulate you or the market or both. Most likely its a pump-and-dump attempt. "Investing in a business can be daunting and risky, so it is not for everyone. The most common pitfalls are mentioned here:  Beyond that:  It all sounds a bit like ""Don't trust anyone"" and sadly, this is true when there's a lot of money involved. So be prepared and do your homework, this sometimes will save you more money than you gain with your investments :) Good luck!" Anything where the initial step of someone trying to get you into anything financial is to send you an e-mail. There are valid situations in which e-mails may be used to introduce you to a financial product or offer, such as if you have signed up for an electronic newsletter that includes such information. But in that particular case, the e-mail isn't the first step; rather, whatever caused you to sign up for the newsletter was. Even in a valid, legitimate scenario, you should obviously still perform due diligence and research the offer before committing any of your money. But the odds that someone is contacting you out of the blue via e-mail with a legitimate financial offer are tiny. The odds that a lawyer, a banker or someone similar in a remote country would initially contact you via e-mail are yet smaller; I'd call those odds infinitesimal. Non-zero, but unlikely enough that it is probably more likely that you would win the grand prize in the state lottery four times in a row. Keep in mind that responding in any way to spam e-mails will simply confirm to the sender that your e-mail address is valid and is being read. That is likely to cause you to receive more spam, not less, no matter the content of your response. Hence, it is better to flag the e-mail as spam or junk if your e-mail provider offers that feature, or just delete it if they don't. The same general principles as above also apply to social media messaging and similar venues, but the exact details are highly likely to differ somewhat. Cosigning on a loan. More broadly any exchange of value between family members or friends. Despite good intentions, these often go awry. If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton.   Either they are lying (scam) or a fool(about as bad) Pretty much any financial transaction where they start by calling you on the phone is a scam. They aren't doing it for your benefit and the caller is on commission.
The dividend quoted on a site like the one you linked to on Yahoo shows what 1 investor owning 1 share received from the company. It is not adjusted at all for taxes. (Actually some dividend quotes are adjusted but not for taxes... see below.)  It is not adjusted because most dividends are taxed as ordinary income. This means different rates for different people, and so for simplicity's sake the quotes just show what an investor would be paid.  You're responsible for calculating and paying your own taxes.  From the IRS website: Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. They are paid out of earnings and profits and are ordinary income to you. This means they are not capital gains. You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Now my disclaimer... what you see on a normal stock quote for dividend in Yahoo or Google Finance is adjusted. (Like here for GE.) Many corporations actually pay out quarterly dividends. So the number shown for a dividend will be the most recent quarterly dividend [times] 4 quarters. To find out what you would receive as an actual payment, you would need to divide GE's current $0.76 dividend by 4 quarters... $0.19. So you would receive that amount for each share of stock you owned in GE. For a true financial advisor 'track record' consists of more than just returns.  Is this person helping their client make the right investment choices, savings choices, tax efficient choices, EXPENSE choices?  Is the advisor keeping me honest with myself, helping me make my goals realistic, my investment options realistic, etc.?  Is the advisor helping me stay disciplined?  For example, if an advisor has a good track record in the market, but has the investments in the wrong types of accounts and is losing too much to taxes, he/she is a bad advisor.  If the advisor is not considering the time horizon of the investor, he/she is a bad advisor.  If the advisor is not helping the client understand their true risk tolerance, he/she is a bad advisor.  All of this regardless of their track record.  Edit: You also seem to be talking about wealth managers.  I am talking about financial managers.  I believe very few wealth managers are actually worth their costs (and most are just blow horn prognosticators) whereas financial advisors are financial educators to clients. Before this agreement, every country had laws on tax-ability of income [including Global incomes]. Quite a few individuals would get away and did not report such income and pay tax if due. In fact quite a few Multi National banks actively created products that helped US Citizens to move money outside and skip reporting. U.S. in order to step up this effort enacted FATCA; essentially as a compliance mechanism, it started with US Head quartered banks operating globally and made reporting mandatory. It stepped up efforts with other countries to ensure foreign banks also enhance reporting of US nationals.  See the benefits, quite a few countries joined up together and as part of OECD, came up with CRS. Thus going forward it will enable tax authorities in member countries to exchange financials impacting taxes. The scope is also for Companies / Organization as quite a few Companies hide away income outside the domiciled country. I have heard a rumor that due to the upcoming Common Reporting Standard the details of bank accounts, including all transactions, will be reported all around the industrialized world and want to know if this is true. Yes this is true and it is not a rumor. The exact amount of data and type of data will be agreed between member countries. However a broad framework exists on what needs to be shared. Is it really true that the Common Reporting Standard is going to cause things like this to happen?  It is very important to note; There is no new Tax Legislation. Even without FATCA/CRS, a honest tax payer was bound to pay legitimate tax due as per the existing tax provisions of the country along with the provisions of DTAA [Dual Tax Avoidance Agreements]. The CRS only enables monitoring and compliance. So if one was already tax compliant, there is nothing to worry. If one was exploiting the loop hole; how will authorities know ... well this will be curbed going forward. As a note, Canada and Australia will start CRS reporting from 2018. Most investors should not be in individual stocks. The market, however you measure it, can rise, yet some stocks will fall for whatever reason. The diversification needed is to have a number of shares of different stocks, and that a bit higher than most investors are able to invest and certainly not one starting out. I suggest you look at either mutual funds or ETFs, and keep studying. (I'm told I should have offered the UK equivalent Investment Trusts , OEIC, or Unit Trusts) It's worth pointing out that a bulk of the bond market is institutional investors (read: large corporations and countries). For individuals, it's very easy to just put your cash in a checking account.  Checking accounts are insured and non-volatile.  But what happens when you're GE or Apple or Panama?   You can't just flop a couple billion dollars in to a Chase checking account and call it a day.  Although, you still need a safe place to store money that won't be terribly volatile.  GE can buy a billion dollars of treasury bonds.  Many companies need tremendous amounts of collateral on hand, amounts far in excess of the capacity of a checking account; those funds are stored in treasuries of some sort. Separately, a treasury bond is not a substitute investment for an S&P index fund.  For individuals they are two totally different investments with totally different characteristics.  The only reason an individual investor should compare the return of the S&P against the readily available yield of treasuries is to ensure the expected return of an equity investment can sufficiently pay for the additional risk. There usually would be a SEC investigation if this kind of behavior is noticed. One thing that bothers me about this article is that, in the midst of all the fear mongering, the author doesn't mention that quote stuffing is designed to screw over *other HFT algorithms* and doesn't have any real impact on investors. Firms doing HFT frequently report this stuff to the SEC; for all we know, Goldman already did. I actually have a problem with these sort of cases because they imply that the issue in the housing bubble was fraud or deception. It wasn't- the problem was overoptimism. Borrowers and lenders jointly indulging in a fantasy that housing prices could never seriously decline in a correlated manner. The longer we pretend it was only the liars who were culpable, and not everyone, the farther we are from being able to prevent this sort of thing. "Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away.  What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but ""No one would listen."" In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called ""Money Merge Account."" It claimed to help you pay off your mortgage in a fraction of the time ""with no change to your budget."" For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as ""Worth Unlimited,"" but the software is the same.  This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find.  People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different."