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Lend to Friends and Family—But Only if You Follow These 3 Tips

February 14, 2019 By Timothy Shanahan

  • JULY 19, 2018 
  • by: PETE CHANDLER

There’s a maxim associated with risky investments (think penny stocks) that goes like this: Don’t invest money you can’t afford to lose. The same holds true with lending money to friends and family, but with an added caution. A “friendly” loan can be a good way to lose money—and tarnish a good relationship with the borrower.

It’s hard to turn down requests
for help from family and friends,
but you have to consider your
own financial circumstances, too.

A 2017 study by Lending Tree, a for-profit lending business, bore this out. Almost a third (28.7 percent) of those who borrowed money from, or loaned money to, a family member reported suffering negative consequences. Side effects included discomfort at holiday gatherings, verbal arguments and, in some instances, irreparable harm to a relationship.

FinTech services such as Zelle and Venmo make it easier than ever to send money to friends and family—and the reality is that many of us do find ourselves cash strapped from time to time.

Gerri Walsh, the president of the FINRA Investor Education Foundation, cites data from FINRA’s National Financial Capability Study, “Nearly one in five study respondents said they spend more money than their income, and 19 percent have overdrawn on their checking account. When I hear data like that, I also hear the sound of those in a financial tight spot knocking at the doors of relatives or friends to ask for a loan.”

“That’s not necessarily a bad thing,” Walsh said. “But you need to know going into it that you may not get your money back. And if something goes wrong, you can damage important relationships, especially if emotions cloud your judgment when deciding to lend.”

Lend This Way

If you’re considering lending money to a friend or a relative, here are three tips to make friend-and-family lending succeed.

Lend only what you can easily spare. It’s hard to turn down requests for help from family and friends, but you have to consider your own financial circumstances, too.

“You can say ‘yes’ and feel good about that choice, or say ‘no’ and feel good about that choice too,” Walsh said. “The choice is personal to you. If you can’t afford to lose the money, it might be better for all parties involved if you say no.”

If the loan is going to make you or others in your family suffer financially—even a little bit—that could cause tensions to flare. You want to remove emotions from the equation as much as possible.

One solution is to lend a little. You might not be able to come up with $1000 without feeling the pinch, but $200 could be painless. Start there.

Loan like a bank. Bob Hope said, “A bank is a place that will lend you money if you can prove that you don’t need it.” That’s another way of saying banks don’t lend unless they have sound reason to believe they will be paid back.

Follow the bank’s lead. Be realistic in your assessment of the friend or family member’s track record of paying money back, and whether you have reason to believe their financial position will improve enough to pay you back what you lent them. Have they borrowed money from you or others before? If so, did they pay back it back?

Do they have the means to pay you back? If the person you are lending money to isn’t working or has others reasons that make repayment unlikely, and loan from you is probably not the way to show your support.

You can also act like a bank by documenting the loan—its amount and when repayment is expected. This helps formalize the transaction and keeps both parties from forgetting about the transaction.

Whether you charge interest is up to you. Doing so to a loved one may seem a bit cold, but there are situations in which it could make good sense. For instance, if the borrower is repaying the loan in installments and you worry that he or she could stop paying after a while, the interest payments the borrower has paid early on can help compensate for delinquent payments later.

But the most important reason to charge a certain level of interest, at least in the case of fairly large loans, is to avoid the IRS’ gift tax.

In the end, remember you’re not really a bank, so if your lender defaults on the loan, chances are you’re not going to seize collateral in lieu of repayment.

Lend money with eyes (and heart) open. Know that defaults occur and your friend or relative might not pay you back. Can you accept that?

Defaults happen in the both the professional lending world and in personal lending. Sub-prime auto loan default rates currently are the highest in over twenty years, at 5.8 percent. And payback is even less dependable in the world of friends and family. The Lending Tree study found that the Generation Xers, who borrowed the most money from their relatives (over $23,000 on average), were the most diligent about paying back their loans, with payback rates at 75 percent of the loan amount. Millennials borrowed less, but their payback rate was lower, at only 55 percent of the loan amount.

Still, that’s a lot of money that never made it back to the friendly lender.

“Ask yourself: Am I going to resent that person if they don’t pay me back? Or am I going to be able to forgive that loan and forgive that person?” Walsh said.

Lend if it’s the latter. Refrain if your emotions will get the better of your relationship with the borrower. Sometimes you simply aren’t the right person to make the loan.

Subscribe to FINRA’s The Alert Investor newsletter for more information about saving and investing.

Two further thoughts from Tim: 1- Why would you want to make a loan that a bank would not? and 2- would you want to gift that much money to that family member? 

If you or a loved one needs guidance about  a family lending situation like this – – we do that!  Give your Trusted Financial Advisor a call at 781-535-6083.

Best regards

Tim Shanahan

Filed Under: educational, Uncategorized

#Adulting: 5 Things I Wish I Knew About Managing My Finances

July 24, 2018 By Timothy Shanahan

Learning personal finance as an adult doesn’t have to be scary–in fact, it can be liberating. When you learn how to manage your money, you tend to feel more in control of your life. Check out this FINRA Investor Education article by KAITLYN KIERNAN .

When you first enter the real world, it can be scary. For all you learned in high school or college, many of us are left feeling unprepared for the responsibilities that come with setting out on your own. This can be particularly true when it comes to managing your finances.

The fact is, very few Americans get the financial education they need in school, so many are left to figure it out on their own. In 2002, just four states required that personal finance education be offered to high school students, according to data collected by the Council on Economic Education, a non-profit group that has promoted children’s financial education for more than two decades.

Since then, the numbers have improved. In 2007, the number of states requiring high school-level personal finance education increased to nine, and in 2016, it was up to 22. However, that doesn’t help those who were out of high school before a personal finance education was implemented, or who were in a state that didn’t have a program at all.

Learning personal finance as an adult doesn’t have to be scary—in fact, it can be liberating. When you learn how to manage your money, you tend to feel more in control of your life.

If you are just getting started on your journey as an adult (or even if you are a few years in and need to level-set), here are five things I wish I knew about managing my finances when I first embarked in the real world.

Understand Compound Interest

The most important thing to understand as an adult is something called compound interest. Compound interest can either be your best friend when it is working in your favor (think retirement savings accounts) or your worst enemy if it is working against you (think credit card debt).

You either can earn interest in savings accounts or on other investments or you can owe interest on any sort of debt you carry. That interest becomes compound interest when it is added to your balance and included in future interest calculations.

An easy example of compound interest working in your favor is when you have a savings account at a bank that earns interest. Say you have $1,000 in a savings account earning 5 percent interest annually (hard to find these days, we know, although rates have begun to rise again). In month one, you would earn $4.17 in interest on the $1,000 in the account. But in month two, you would earn interest on $1,004.17, so the next month you would earn $4.18 in interest.

That may not seem like a big difference, but over time, it can really add up. If you didn’t touch that account for 10 years—you didn’t deposit any additional money or take any money out—and the interest rate stayed constant, you would end up with $1,647 without lifting a finger! Even if your account paid 1 percent interest annually (closer to today’s national average), you would have $1,105, and with 2 percent, $1,121.

Unfortunately, the same principle applies to most of your debt like student loans, mortgages and unpaid credit card balances. The balance you don’t pay off each month will accrue interest and increase your balance, so you pay interest on this higher balance each time. To make matters worse, credit cards generally have significantly higher interest rates than savings accounts. In fact, in June 2018, the national average annual percentage rate (APR) hit a record high of 16.75 percent. That means unpaid credit card balances can quickly spiral out of control.

To learn more about how you can use compound interest to your advantage, check out The Time Is Now: The True Value of Time for Young Investors.

Take Inventory—and Set Goals

What are you making (after taxes)? What are your expenses? Is there anything unnecessary in those expenses? How do your expenses compare to how much money you have coming in every month? You need to ask yourself these questions—and more—to truly get started on the road to managing your money like an adult.

Use this information to set up a realistic spending plan. But don’t stop there. Set goals. Setting goals helps you to stay focused on saving and gives meaning to the dollars you put away (or to the luxuries you skip) to make your goal a reality.

Some goals will take longer to achieve than others, which is why it is good to set some short-term goals. If you are only focusing on saving for events far in the future, like retirement, your long-term goals can begin to feel overwhelming. Your short-term goals can help you stay on track toward achieving those goals that are further down the road.

What are some good short-term goals? If you have high interest debt like credit card debt, make paying that down a priority (see the bit about compounding interest above). Here are three strategies to get you started.

Set Up Your 401(k) or IRA

When you start your first full-time job, there are plenty of outlays vying for a piece of your new paycheck. You might have student loans to pay, an emergency fund to save for and new furniture to buy for your new apartment. You might think it’s impossible, or unnecessary, to set some money aside for retirement now. Let’s be honest, it’s decades away and you are just getting started.

But that’s no excuse. Wrong. You need those decades to build up a retirement income you can actually live on, and the earlier you start, the better off you will be. Many employers offer a 401(k) and it is a great way to get started without having to do too much heavy lifting. A rough real-world estimate of how much you should put aside—at last 10 percent.

Many employers also match an employee’s 401(k) contributions up to a certain percent of salary. If you contribute at or beyond that threshold, you take full advantage of the benefit. But if you contribute less than your employer is willing to match, you may be passing up free money. Unfortunately, many people do miss out. Americans leave billions of dollars in 401(k) company matches on the table each year.

But investing in a 401(k) can have other benefits as well, including tax advantages that are worth a second look. Check out Retirement Isn’t Free—But Your 401(k) Match Is for more information.

Don’t Ignore An Emergency Fund

When I first graduated, I set up my 401(k) and contributed enough to get the full match, but then I was putting everything I could into my student loan payments. It wasn’t until I had a meltdown after receiving a larger-than-expected medical bill that I came to appreciate the importance of an emergency fund.

There will always be large, unexpected expenses in life, whether it is a medical bill, a flat tire, a family emergency that requires a flight home or something else unexpected. An emergency fund prepares you for that inevitability and allows you to tackle the challenge without resorting to your credit card (see above about how quickly compound interest can come to hurt with credit card debt).

Ideally, an emergency fund should be big enough to cover three to six months’ worth of expenses, but you can start small—even a few hundred dollars can help give you a buffer as you get started.

Related: Start Your Financial Road Trip With an Emergency Fund

Consider Other Investments

Let’s get one thing straight: You don’t need to make a lot of money to invest. It’s a common misconception that investing is for rich people, but it isn’t—it’s for everyone. In fact, investing early could help you become one of those rich people for whom you thought investing was reserved!

When you have paid off high-interest debt and have an emergency fund set up, it’s a good idea to consider opening a non-retirement investment account, such as a brokerage account, to save money and invest toward future goals. That’s because the goal of investing is to grow your money faster than you typically could in a bank account.

Investing with a small amount of money is easier than ever with new apps that will let you start investing with just a few dollars, basically allowing you to buy fractions of stocks or funds that invest in a wide range of companies. Before you get started with any of these platforms, however, be sure to check out these tips on automated investment tools.

Subscribe to FINRA’s The Alert Investor newsletter for more information about saving and investing.

 

If you or a loved one needs help in this area- we do that! Give your Trusted Financial Advisor a call today.

 

Best regards

 

 

 

Tim Shanahan

Filed Under: Uncategorized

Getting a Handle on Virtual Currencies

July 24, 2018 By Timothy Shanahan

MAY 31, 2018 | written by FINRA STAFF AND THE BBB INSTITUTE
This article is the first in a series on the emerging world of digital assets. Additional articles explore Initial Coin Offerings, digital tokens, the virtual currency regulatory landscape, and tips to avoid fraud and scams in this area.
Social and traditional media have been abuzz with articles and information about the rising phenomenon of virtual currencies. Words and phrases like blockchain, cryptocurrency, distributed ledger, initial coin offering, and digital tokens populate our newsfeeds.

According to the Commodity Futures Trading Commission, virtual currencies are “a digital representation of value that functions as a medium of exchange, a unit of account and/or a store of value.”

Significant uncertainty currently surrounds virtual currencies in general and their potential value as investments in particular. Only time will tell whether, and if so which, virtual currencies become a mainstream component of our financial markets—and whether investments in this emerging sector make sense as part of a diversified portfolio. Before you make any investment decisions, it is critical to understand some of the concepts underlying this emerging world of virtual currencies.
What are Virtual Currencies?
According to the Commodity Futures Trading Commission, virtual currencies are “a digital representation of value that functions as a medium of exchange, a unit of account and/or a store of value.” In other words, each currency is represented by alphanumeric codes that may be generated and recorded on a blockchain network and recognized as a method of payment by users on that network. In some cases, you can spend and trade virtual currencies, but these products do not have the same legal status as money, or “legal tender,” in the United States, Canada, Mexico, and most other jurisdictions.
The Internal Revenue Service states that virtual currencies are to be treated as property for U.S. federal tax purposes, with transactions required to be reported in U.S. dollars. If virtual currency is used to pay wages, it is subject to federal income tax withholding, and gains and losses from the sale or exchange of virtual currency have tax implications. If you hold virtual currencies for personal or investment purposes, the IRS requires you to report any gains or losses, which would be subject to capital gains tax rules.
One popular type of virtual currency is known as cryptocurrency, or simply crypto. The term crypto refers to the process of cryptography, which is a mathematically intensive encryption process designed to enhance data protection and authentication. Some people are interested in cryptocurrencies for their perceived anonymity and ability to keep transactions secret, and one of the earliest and perhaps most well-known cryptocurrencies is bitcoin.
What is Bitcoin?
Bitcoin is a cryptocurrency developed in 2009 by an anonymous person or group of persons operating under the nickname Satoshi Nakamoto. Like other cryptocurrencies, bitcoin is distinct from “fiat currencies” such as the dollar, euro, renminbi or yen. Unlike a fiat currency, bitcoin isn’t represented or organized by a physical paper unit or coin. Rather, each bitcoin is a unique alphanumeric string of computer code. Rather than being issued like fiat currencies by a central bank, a currency such as bitcoin is controlled by technology that determines how many bitcoins are produced and how transactions that use bitcoin are recorded. Proponents of the crypto world believe that bitcoin can be an attractive alternative to fiat currencies because it is not controlled by any central bank or government.
Bitcoin is exchanged on the Bitcoin Network, a peer-to-peer payment system that operates using cryptography. Users can send and receive bitcoins by broadcasting digitally signed messages to the network using a cryptocurrency wallet. Transactions on the Bitcoin Network are recorded on a publicly distributed ledger called a blockchain, and validated by a proof-of-work system called mining.
What is Blockchain?
Blockchain, also known as distributed ledger technology, is the technology that powers bitcoin and many other virtual currencies. In the case of bitcoin, blockchain functions through the participation of many individuals who offer their computing power to maintain the Bitcoin Network and record transactions (for instance, when someone trades or spends bitcoins). Those who employ math and technology to create new bitcoins are known as “miners.”
Miners engage in complex computing problems to facilitate verification and posting of bitcoin transactions. As a reward for solving these computing problems, a bitcoin miner is awarded a new bitcoin. All of this computing takes a lot of energy, which is why today’s mining centers tend to be located in regions where energy is inexpensive.
Blockchain technology is the critical feature of bitcoin because it prevents users of bitcoin from double-spending their coins and creates a permanent record of transactions.
Are There Other Cryptocurrencies?
Bitcoin is one of thousands of cryptocurrencies. The purpose, functionalities and use of these cryptocurrencies may vary. Some share similarities with bitcoin. For instance, Litecoin, created in 2011 and the brainchild MIT-cum-Google coding prodigy Charlie Lee, is similar in many respects to bitcoin but it is not identical, since it uses a different mining algorithm.
Ethereum (2015), on the other hand, is in fact a platform for “smart contracts,” which are known as conditional transactions: computer code that enable certain events to be triggered when certain pre-defined conditions are met, such as the ability to unlock real products (renting a car, for instance) when payment is made. Ethereum has its own cryptocurrency known as Ether, which can be the form of payment used on these smart contracts.
Use Caution
Knowing about virtual currencies and investing in them are two very different things. Investing in virtual currencies can take many forms: you can purchase coins in the hope they will appreciate, or invest in platforms that facilitate blockchain technology and other aspects of the virtual currency revolution and hope they succeed. Doing so carries significant risk. Only invest what you can afford to lose, and be aware that you may lose some or all of your investment.
As with other types of investing, virtual currency investing has its share of fraud and scams, not to mention cyberattacks. There are also major questions about how these currencies are regulated both domestically and across the globe. Less regulation means less protection for investors.
Subscribe to FINRA’s The Alert Investor newsletter for more information about saving and investing.
If you need advice regarding crypto-assets give us a call- we do that!
Tim Shanahan
CEO

Filed Under: Compass Capital, educational, Uncategorized

Omar, Tom & Tim Focus on a Client-First Commitment with SEI

May 10, 2018 By Timothy Shanahan

Omar Tom Tim at SEI SAC May 18

Omar Mian, Tom Licciardello & Tim Shanahan at the SEI Strategic Advisor Conference in Washington DC.

Top Compass Advisors: Omar Mian, Tom Licciardello and Tim Shanahan, this week all attended the SEI Strategic Advisor Council National Meeting in Washington DC .  The conference was attended by the country’s top 250 financial advisors who use SEI as an investment solution for their clients. The theme of this conference was SEI’s Client-First Commitment. This theme is consistent with the values of all Compass advisors as we are committed to putting our client’s interest first.

Carmen Tim Al at SEI SAC in DC May 18

SEI Director Carmen Romeo and SEI Founder and Chairman Al West flank Compass Capital Corporation founder Tim Shanahan

Compass Capital is now in its 25th year of working with SEI as our primary platform for client investments. Compass has used the SEI practice management, operational and investment and trust services to help grow its business by a factor of 10 in that time. You may have heard us mention that we try to have  a “deep bench” at Compass and our partnership with SEI is a significant part of deepening our bench.

We congratulate SEI founder and Chairman Al West on SEI’s 50 years of business success. SEI is an amazing story with its start as a class project for Al West and some classmates while getting advanced degrees at the Wharton School of Business in 1968.

We also commend Carmen Romeo for his vision and leadership in starting and managing the firm’s investment advisors business. Carmen V. Romeo has been an Independent Director of SEI Investments Co. since June 1979 and was previously SEI’s Executive Vice President from December 1985 to December 2004 and Treasurer and Chief Financial Officer from June 1979 to September 1996.

Today SEI has 3,200 employees worldwide, serves about 8,600 clients, including banks, trust institutions, wealth management organizations, independent investment advisors like Compass Capital, retirement plan sponsors, corporations, not-for-profit organizations, investment managers, hedge fund managers, and high-net-worth families.

SEI manages or administers $869 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $335 billion in assets under management and $530 billion in client assets under administration.

SEI is a public company with a history of innovation and is listed on the NASDAQ exchange under the symbol SEIC.

We hope that our putting some light on SEI helps our clients to understand why we’ve chosen to partner with SEI for so many years.

Filed Under: Uncategorized

Keeping Your Account Secure: Tips for Protecting Your Financial Information

September 12, 2016 By Timothy Shanahan

Keeping Your Account Secure: Tips for Protecting Your Financial Information – FINRA Investor Alert

It is our goal to keep you up-to-date on the latest market news, so you have meaningful context for your investment portfolio.
Your brokerage firm has an obligation to safeguard your personal financial information. And every investor should take time to understand their firm’s cybersecurity procedures. But even the best procedures cannot prevent all instances of identity theft-especially if the vulnerability lies with you, the customer. Here are critical steps you can take to safeguard your financial accounts and help prevent identity theft.

How Does Identity Theft Occur?
A host of ways. Some identity thieves use keystroke-logging software to capture usernames and passwords, disseminating these programs through instant messages, emails, or freeware. Others “phish” for sensitive information by sending phony emails that purport to come from a legitimate financial institution but which ask for information your firm would never request through email-such as confirmation of an account number, password, credit card number, or Social Security number. Still others use the old-fashioned method of “dumpster-diving” to recover your discarded account statements or other records that haven’t been properly shredded.

How Can I Protect Myself?
Take the following steps to secure your brokerage accounts and your personal financial information:

Use Strong Passwords and PINs and Keep Them Secret. Use strong passwords and PINs that contain both numbers and letters and, if allowed, symbols. Do not share your passwords or PINs with others, and do not store them on your computer. If you need to write them down, store your list in a secure, private place. You should change your passwords and PINs regularly and use a different password and PIN for each of your accounts.

Maintain Your Computer Security. Personal firewalls and security software packages (with anti-virus, anti-spam, and spyware detection features) are a must if you engage in online financial transactions. Make sure your computer has up-to-date security software, including security patches, that the software is configured for automatic updates, and that the software is always turned on. For laptops, be sure to use encryption software. Computer hardware and software providers also maintain security pages on their websites with tips for checking and improving the security of your system.

Use Your Own Computer. It is generally safer to access your brokerage account from your own computer or device. Avoid using public computers to access your brokerage account. Public computers may contain software that captures passwords and PINs, providing that information to others at your expense. If you do use another computer, be sure to delete your “Temporary Internet Files” or “Cache” and clear all of your “History” after you log off your account. You should occasionally check to make sure that no one else has attached any device or added programs to your computer without your knowledge or consent. Consult the Help function on your browser and operating system to learn how to delete this information.

Log Out Completely. Always click the “log out” button to terminate your access to your brokerage firm’s website. Access may not be terminated if you simply close or minimize your browser or type in a new Web address when you’re done using your online account. Other users of the computer might be able to re-enter the site and have access to your account online if you do not properly log out. You also potentially expose yourself to “session stealing” if you have multiple Web pages open while logged on to your brokerage account. Avoid multi-tasking on multiple Web pages when checking your financial accounts online-or, if you must visit another site, use a different type of browser rather than opening another window.

Be Prudent When Using Wireless Connections. Unsecured wi-fi connections do not provide as much security as either wired Internet connections, encrypted wireless networks or your mobile carrier’s cellular data connections. Many hotspots-wireless networks in public areas like airports, hotels, and restaurants-reduce their security settings so it is easier for individuals to access and use these wireless networks. This increases the possibility that someone may intercept your information. You may decide that accessing your online brokerage account through a wireless connection is not worth the security risk. If you use your own wireless network, make certain you secure the network with wireless encryption.

Use Apps Wisely. If you use apps on mobile devices to access your financial accounts, be sure to password-protect your device-and make sure you select the highest security setting that the app offers.

Check for Secure Websites. When you access your brokerage account online, check to ensure that the log in page indicates that it is a secure site. The address of a secure website connection starts with “https” instead of just “http” and has a key or closed padlock in the status bar (which typically appears in the lower right-hand corner of your screen). When you click on the padlock, the security certificate should confirm the identity of the site you are visiting. In Microsoft Internet Explorer 7, look for the address bar to turn green.

Be Careful Downloading. When you download a program or file from an unknown source, you risk loading malicious software programs on your computer. Download software only from sites you know. Be wary of free software because it can be accompanied by other software such as spyware. Do not install software unless you know what it is and what it does and do not click on links in pop-up windows. Using anti-spyware software helps protect you from such programs.

Don’t Respond to Emails Requesting Personal Information. Legitimate companies will not ask you to provide or verify sensitive information through email. If your financial institution actually needs personal information from you or your statement, call the company yourself-using the number in your files or on your statement, not the one the email provides! Do not respond to emails, such as “phishing” emails, seeking your password, PIN, or other personal information.

Read Your Statements. Read all your monthly account statements (bank, brokerage, credit card, etc.) thoroughly as soon as they arrive to make sure that all transactions shown are ones that you actually made or authorized. Check to see whether all of the transactions that you thought you made appear as well. Be sure that your brokerage firm has current contact information for you, including your mailing address and email address. If you see a mistake on your statement or do not receive a statement, contact your financial institution or credit card issuer immediately and follow-up in writing, where necessary.

Secure Your Confidential Documents. Keep all your financial documents in a secure place, and be careful how you dispose of any documents with financial or other confidential information. Shred documents that have confidential financial or identification information before throwing them away.

Using the Cloud?

If you are considering storing your personal financial information in the cloud, here are some additional considerations:
Research the provider – Just as you are careful to choose a reputable broker or investment advisor, look into the reputation of the cloud provider for positive or negative comments in press coverage or social media. In addition, review their security policies; do they appear thorough and understandable?

Compare costs – Be sure to understand all fees, including whether you will be charged more if you increase your storage.
Look for Two-Step or Two-Factor Authentication – Also known as multi-factor authentication, two-step or two-factor authentication is a strong approach to controlling access and is effective at preventing account theft. In addition to username and password, you may need to enter a code received via text message or a one-time password generated by a small device.

Ensure encryption – Verify whether your data will be encrypted while stored in the cloud.
Read the Terms – Thoroughly read any terms of service before signing an agreement or clicking an “I Agree” box online. And ask about any terms or conditions you don’t understand.
Safeguard Your Social Security Number. Do not use your Social Security number as a username, password or PIN, and make sure that it does not appear on your printed checks. If your Social Security number appears on your driver’s license, be sure to ask your state’s Department of Motor Vehicles whether it can use an alternative number. Keep your Social Security card in a safe place and avoid carrying it with you. You should also be sure to safeguard the social security numbers of any dependents.
Do a Periodic “Identity Theft” Check. Reviewing your credit report may alert you to inaccuracies and unauthorized activity. You can obtain a free credit report every 12 months from three different credit bureaus by contacting the Annual Credit Report Request Service at AnnualCreditReport.com. This is the only authorized online source for you to get a free credit report under federal law. Be aware that you will have to disclose your Social Security number to obtain this report.

What Should I Do If My Identity Has Been Compromised?
If you think that your personal information has been stolen, immediately contact your brokerage firm and other financial institutions, including credit card issuers, to notify them of the problem. You should also notify the credit bureaus to put a fraud alert on your file. If you detect unauthorized transactions in or withdrawals from your brokerage account, ask the firm to investigate. Be aware that your firm will need time to determine what happened and may need your help in identifying family members or others who might have access to your account. In the meantime, be sure to change your username, password and PIN for the account.

Additional Resources

To obtain your free annual credit report:

http://www.annualcreditreport.com
For more information on identify theft, including how to file a complaint:
http://www.consumer.ftc.gov/features/feature-0014-identity-theft
For more information on phishing, spyware, and other online threats:
http://onguardonline.gov
http://www.sec.gov/investor/pubs/phishing.htm
For more information on smart investing:
http://www.finra.org/investor
http://www.sec.gov/investor.shtml
To receive the latest Investor Alerts and other important investor information sign up for Investor News.
– See more at: http://www.finra.org/investors/alerts/keeping-your-account-secure-tips-protecting-your-financial-information?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F012816%5FFINAL#sthash.W6cSVqV9.dpuf

If you have any questions, please do not hesitate to contact any of our Trusted Financial Advisors. We look forward to speaking to you soon.

Thanks
Tim Shanahan
President and Chief Investment Strategist

Filed Under: Uncategorized

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  • Lend to Friends and Family—But Only if You Follow These 3 Tips February 14, 2019
  • #Adulting: 5 Things I Wish I Knew About Managing My Finances July 24, 2018
  • Getting a Handle on Virtual Currencies July 24, 2018
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