If you don't have the time, ask the planner to come some other time, rather than risk losing your principal investment by signing a blank form. Cross out all empty sections, especially the ones that contain details of joint holders and nominees. Never sign a blank instruction for repayment or encashment of your investments. Many investors have lost their entire investments due to signing blank instructions. And since their signatures are genuine, it becomes very difficult to recover the money in a court of law.

5. Never let your planner sign your name to any document.

This is a fraud, which could land you in trouble with the law of the land. Furthermore, you cannot control where else the planner maybe forging your signatures. Think of all implications before you try to take short cuts like these.

6. Never let your planner use his address on account statements instead of yours.

You should receive periodic statements directly from the mutual fund, brokerage firm, or insurance company. Never allow your planner to have such documents go to his office instead of to you. Periodically check your account balance directly with the mutual fund, brokerage firm, or insurance company. All funds are mandated under law to send at least one statement per annum to every investor. Don’t believe in statements made on blank paper; insist on statements on the mutual funds stationery.

These are six of the common precautions that will safeguard you against potential fraud. They sound common sensical, but you would be surprised at how many investors, both individuals and institutional fall prey to these every year. We hear very little about them as either the investors don't want to admit their foolishness by going to the police in such cases, or the mutual fund or insurance companies or brokerages pay up rather than risk scaring other investors by letting the fraud be known publicly. Think about this and implement these safeguards. You will be glad you did.

(The author, Ajay Bagga is CEO of Lotus India AMC)