If you've been following the Bernie Madoff soap opera, today the plot thickened.  The Wall Street Journal reported yesterday that prosecutors are investigating eight of his investors who may have knowingly participated in his fraud, some requesting specific losses at times to offset gains in accounts they had outside of Madoff's management, and at least one getting allegedly fabricated returns of over 900% in a given year.  I'm sure more specifics will come out as the investigation continues but some of these apparent "victims" may not have been victims at all.

While my heart goes out to those who truly lost money by investing with Bernie, I think we'll be hearing about more arrests being made and more people going to jail over this. 

How do you make sure you don't become a victim of a ponzi scheme?  Ask questions!  Does your investment advisor custody money themselves (like Madoff) or do they use a third party, like Charles Schwab or Fidelity, where you get independent confirmation that your money is actually in your account?  This is really important!!!

Will your advisor disclose how they invest your money and in what investments?  If they won't answer questions like this and disclose how your money is being invested, that's a big red flag!

Most importantly, if it sounds too good to be true it probably is.  No one in the investment world can get steady gains year after year in the stock market.  It just doesn't happen.

The good news is that most investment advisors are hard working, passionate, honest people who love what they do and truly want to help others succeed financially.  If you're thinking of making a change to a new investment advisor, look for someone who is passionate about what they do.  After all, would you trust a heart surgeon that was just in it for the money?