YOUR MONEY: CHECK
OUT BROKERS AND INVESTMENT ADVISORS
Be sure you know your broker
or advisor before you get involved with any investment.
While investment information about the company or security or
company, you should first know the person you are trusting with
your money and investments.
Checking Out Brokers and Investment Advisers
Federal or state securities
laws require brokers, investment advisers, and their firms to be
licensed or registered. But it's up to you to find that
information and use it to protect your investment dollars. The
good news is that this information is easy to get, and one phone
call or web search may save you from sending your money to a con
artist, a bad financial professional, or disreputable firm.
Before you invest or pay for
any investment advice, make sure your brokers, investment
advisers and investment adviser representatives have not had
run-ins with regulators or other investors. You also should
check to see whether they are registered or licensed.
This is very important,
because if you do business with an unregistered securities
broker or a firm that later goes out of business, there may be
no way for you to recover your money.
Registration Depository (CRD) is a computerized
database that contains information about most brokers, their
representatives, and the firms they work for. You'll also
find information about the brokers' educational backgrounds and
where they've worked before their current jobs.
You can ask either your state
securities regulator or the Financial Industry Regulatory
to provide you with information from the CRD. Your state
securities regulator may provide more information
from the CRD than FINRA, especially when it comes to investor
complaints, so you may want to check with them first.
People or firms that get paid
to give advice about investing in securities generally must
register with either the SEC or the state securities agency
where they have their principal place of business. Investment
advisers who manage $25 million or more in client assets
generally must register with the SEC. If they manage less than
$25 million, they must register with the state securities agency
where they have their principal place of business.
Some investment advisers
employ investment adviser representatives, the people who
actually work with clients. In most cases, these people must be
licensed or registered with your state securities regulator to
To find out about investment
advisers and whether they are properly registered, read their
registration forms, called the Form ADV.
Part 1 has information about the adviser's business and whether
they've had problems with regulators or clients. Part 2 outlines
the adviser's services, fees and investment strategies.
You can view an adviser's most
recent Form ADV online by visiting the Investment
Adviser Public Disclosure (IAPD) website. You can
also get copies of Form ADV for individual advisers and firms
from the investment adviser, your state
securities regulator, or the SEC,
depending on the size of the adviser.
few questions to get started:
What experience do you have, especially with people in my
Where did you go to school? What is your recent
What licenses do you hold? Are you registered with the
SEC, a state, or FINRA?
Are the firm, the clearing firm, and any other related
companies that will do business with me members of SIPC?
What products and services do you offer?
Can you only recommend a limited number of products or
services to me?
How are you paid for your services?
Have you ever been disciplined by any government
Will you send me a copy of both parts of your