The Investor Advocacy Clinic has been working with the Georgia State University ROTC to provide investor education presentations to cadets. For our first presentation in spring 2014, interns Thomas Abrahamson, Timothy Guilmette and Nataliya Nemtseva presented “Take Charge of Your Financial Future.”
The early morning session began with Lt. Col. William J. Brooks, Ph.D, describing the risk of fraud that members of the military face, the importance of the topic and introducing the interns. After Col. Brooks turned the presentation over to the clinic interns, Timothy Guilmette recounted his 12-year military career and discussed the importance of financial readiness.
Nemtseva provided an overview of the FINRA Investor Education Foundation 2012 National Capability Study’s findings concerning military members and financial preparedness. According to Nemtseva’s review of the study, nearly 50 percent of military members break even or spend more than they earn, 50 percent do not invest outside of military retirement and 43 percent do not have emergency funds.
Abrahamson then discussed the importance of budgeting and taught the cadets where to start.
Guilmette provided an overview of a Leave and Earning Statement (LES) to help cadets begin budgeting and provide them with the skills to counsel the soldiers they will soon lead.
The interns also provided practical tips for managing and getting out of debt and setting up an emergency fund. The formal session concluded with a discussion of the importance of planning and investing now. Cadets asked several questions concerning budgeting, saving and investing.
The following semester, in fall 2014, student interns Brittany DeDiego and Christopher Pugh presented “How to Spot and Prevent Investment Fraud,” covering common scams, red flags of fraud and how to be an informed investor.
DeDiego and Pugh explained some common tactics of fraud, including phantom riches, source credibility, social consensus, reciprocity, scarcity, and affinity fraud. They also highlighted other red flags investors should be aware of, like guaranteed returns, complex strategies, unregistered products, overly consistent returns, missing documentation, account discrepancies, and pushy salespeople.
The interns then led the cadets through a Fraud Awareness Quiz prepared by the North American Securities Administrators Association. The cadets answered each question, then the student interns shared and explained the correct answer. The cadets excelled on the quiz and showed off their knowledge of safe investing.
At the end of the presentation, the student interns shared several resources that can help prevent investment fraud such as FINRA’s BrokerCheck and the Security Exchange Commission’s EDGAR website. Finally, the interns led a robust question and answer session where the cadets asked several thoughtful questions about investment fraud.