When selecting a broker or investment advisor, research the person's education and
professional history as well as the firm they work for. Ask:
- Have they worked with others who have circumstances similar
to yours?
- Are they licensed in your state? Your state securities administrator lists individuals and firms that are registered in your state. Ask if
the regulatory office has any other background information. You can find out how more about your state securities regulator by visiting www.nasaa.org.
- Have they had any run-ins with regulators or received serious complaints from investors? Call your local state securities regulator or the SEC. You can also check out FINRA’s BrokerCheck to find licensing, employment, and disciplinary information. Or call FINRA toll-free at 1-800-289-9999.
- How are they paid? Is it an hourly rate, a flat fee, or a
commission that depends on the investments you make? Do they get a bonus from
their firm for selling you a particular product?
- What are the fees for setting up and servicing your account?
If you are seeking more information or have an investment advisor problem that you
are unable to resolve directly, you can contact the SEC or FINRA.
Additional organizations that could also be helpful are:
- www.Bankrate.com offers a semi-annual
rating of the top online brokerage firms that trade stocks and mutual funds.
- www.Validea.com offers data on Wall Street
analysts and their recent stock picks.
- The Commodity Futures Trading Commission (CFTC) provides consumer alerts and
advisories in the "Consumer Protection" section at www.cftc.gov.
The Commission oversees the Reparations Program that resolves disputes between
commodity customers and commodity professionals. Through this program, you can
institute "reparations" proceedings against commodity professionals registered
with the Commission who you believe have violated the anti-fraud or other
provisions of the Commodity Exchange Act. To ask a question, report information
or submit a complaint, contact the CFTC.
- Both the North American Securities Administrators Association and the National
Futures Association can offer helpful information.
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