|Thursday, September 14, 2006|
Nancy Condon (202) 728-8379
Sarah Bohn (202) 728-8988
NASD Investor Alert Warns Workers About Early Retirement Investment Pitches
Washington, DC — NASD issued an Investor Alert today warning workers about investment pitches that guarantee comfortable early retirements. These pitches—often made at free seminars—promise high annual returns but make little or no mention of the risks associated with the aggressive investment scenarios the early retirement packages involve. A recent NASD enforcement action identified one such scheme.
The Alert, Look Before You Leave: Don't Be Misled By Early Retirement Investment Pitches That Promise Too Much urges investors to think carefully before acting on promises such as, "Everyone can retire early!" or "You can make as much in retirement as you can by continuing to work!" and offers tips for investors on how to avoid being taken in.
"An early retirement is an appealing concept," said NASD Chairman and CEO Mary Schapiro. "But, before workers invest all or part of their hard-earned nest eggs, it is important they fully understand the risks involved and seek a second opinion from a trusted financial professional."
NASD is issuing this Alert because it is aware of instances in which employees who had built up sizeable retirement savings were misled and financially harmed by flawed, even fraudulent, early-retirement investment schemes. Not everyone may have the resources to retire early, the Alert explains - particularly workers with limited opportunities for other employment or who haven't saved enough for an extended retirement.
Before workers invest their retirement savings, the Alert offers the following tips:
Additional information is available in a previous NASD Investor Education materials, including NASD Investor Alerts, Variable Annuities: Beyond the Hard Sell; Mutual Fund Breakpoints: A Break Worth Taking and Understanding Mutual Fund Classes; in addition to the Securities and Exchange Commission's Variable Annuities: What You Should Know and IRS's FAQs related to Section 72(t), FAQs regarding Revenue Ruling 2002-62. To receive NASD's latest Investor Alerts and other important investor information via email, sign up for NASD's Investor News.
NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD offers a broad range of tools and programs to help people better understand investing and know how to protect themselves along the way — including developing and publishing Investor Alerts, brochures and online resource guides on such critical topics as mutual fund class shares and 401(k) and college savings plans. NASD has distributed this information through its website, printed materials and Investor Forums.
NASD touches virtually every aspect of the securities business — from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our website at www.nasd.com.