NASAA Warns Investors of "Cross-Selling" Risks

The North American Securities Administrators Association ("NASAA") warned investors of the risks associated with "cross-selling" (i.e., a common sales technique that "lures investors into purchasing securities related to the original investment").

In an Investor Advisory, NASAA stated that cross-selling may be mutually beneficial when done correctly. However, NASAA noted, trying to "push a product" that is outside an investor's scope of knowledge can mislead the investor. NASAA set out the following red flags:

• unregistered investment professionals and unregistered products;

• aggressive sales tactics;

• high returns with little to no risk;

• unprompted investment offerings; and

• limited information with no written documentation.