If the results of a study from Actimize are accurate, fraud and organized crime are a serious problem in the financial services industry. Here is some of the data:
- "73 percent of respondents, rate the finance industry's readiness to tackle the employee fraud problem as poor to somewhat acceptable."
- "Of those who knew, 50 percent said they have had a case of data theft in the last 12 months."
- "85 percent of respondents have been affected by employee fraud and 65 percent see the threat increasing."
- "More than 50 percent of respondents believe that half, or less, of employee fraud occurring at their institutions is being detected."
This is pretty scary stuff -- especially given how dependent so many Americans are on the industry. If workers have no problems stealing from their employees, is your portfolio safe? Can you trust that those of who a fiduciary responsibility to you are really acting in your best interests, and aren't motivated by their own greed?
In his book Why Smart People Do Stupid Things with Money, Bert Whitehead suggests the use of fee-only financial advisors as a safeguard against the self-dealing financial services industry.
Given how rampant self-dealing appears to be, that seems like a good idea. Of course, you could also handle your finances yourself if you are willing to do devote the time to become a personal finance expert.
Thanks to the FraudFiles blog for bringing this survey to my attention.
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