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Ask Questions

Questions You Should Ask About Your Investments ...
and What To Do If You Run Into Problems

That's the best advice we can give you about how to invest wisely. We see too many investors who might have avoided trouble and losses if they had asked basic questions from the start.

We encourage you to thoroughly evaluate the background of any financial professional with whom you intend to do business—before you hand over your hard-earned cash.

Investor Tip

Which financial professional you select is very important for several reasons. You'll want to investigate thoroughly before doing business with a financial professional or firm that has a history of complaints or problems with regulators. Also, you should know that if your financial professional or his or her firm goes out of business or declares bankruptcy, you might not be able to recover your money—even if an arbitrator or a court rules in your favor.

It doesn't matter if you are a beginner or have been investing for many years, it's never too early or too late to start asking questions. It's almost impossible to ask a dumb question about how you are investing your money. Don't feel intimidated. Remember, it's your money at stake. You are paying for the assistance of a financial professional.

A good financial professional will welcome your questions, no matter how basic. Financial professionals know that an educated client is an asset, not a liability. They would rather answer your questions before you invest, than confront your anger and confusion later.

In this brochure, you'll find some questions that you should ask about investment products, the people who sell those products, and the people who provide investment advice to you. We've also included some tips on how to monitor your investments and handle any problems.

Keep this brochure on hand when considering an investment and use it by asking the right questions before you buy. Have a pen and piece of paper ready to take notes on the answers. They can come in handy if there is a dispute later about what was said during the transaction. Taking notes also sends a signal to your financial professional: I'm a smart and serious investor who wants to know more about the risks and rewards of investing.

Questions About Products:

For mutual funds:

Questions About The People Who Sell Investments or Provide Investment Advice:

Investor Tip - Check Out Your Financial Professional

You can verify your broker's disciplinary history by checking the Central Registration Depository (CRD). Either your state securities regulator or FINRA can provide you with CRD information. Your state securities regulator may give you more information from the CRD than FINRA, especially when it comes to investor complaints, so you may want to check with them first. You'll find contact information for your state securities regulator on the website of the North American securities Administrators Association. To contact FINRA, visit FINRA's BrokerCheck website, or call them toll-free at (800)289-9999.

You can find out about investment advisers and whether they are properly registered by reading their registration forms, called the "Form ADV."  You can view an adviser's most recent Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website.  At present, the IAPD database contains Forms ADV only for investment adviser firms that register electronically using the Investment Adviser Registration Depository.  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.


Questions About the Progress of Your Investments:

How to Handle Problems:

Act promptly! By law, you only have a limited time to take legal action. Follow these steps to solve your problem:

  1. Talk to your financial professional and explain the problem. Where is the fault? Were communications clear? Refer to your notes. What did the financial professional tell you? What do your notes say?
  2. If your financial professional can't resolve your problem, then talk to the financial professional's supervisor (which, for brokers, is often the firm's branch manager).
  3. If the problem is still not resolved, write to the compliance department at the firm's main office. Explain your problem clearly, and how you want it resolved. Ask the compliance office to respond to you within 30 days. If you're still not satisfied:
  4. Send us your complaint by using our online complaint form or you can reach us as follows:
    Securities and Exchange Commission
    Office of Investor Education and Advocacy
    100 F Street, N.E.
    Washington, D.C. 20549-0213

At the SEC, we will research your complaint, contact the firm or person you have complained about and ask them to respond to your specific complaint or question. Sometimes our intervention yields a satisfactory result. If these steps don't work, you may need to take legal action on your own. We can send you information on mediation and arbitration, and suggest how to locate a lawyer if you need one.

Investor Tip

When you ask these questions, write down the answers you receive and what you decided to do. If something goes wrong, your notes can help to establish what was said. Let your financial professional know you're taking notes. They'll know you're a serious investor and may tell you more. Use our form for taking notes when you speak to your financial professional.

For more information on how to invest wisely, ask for our publications:
Invest Wisely: Advice From Your Securities Industry Regulators, Protect Your Money: Check Out Brokers and Investment Advisers, and Invest Wisely: An Introduction to Mutual Funds. You can also get other SEC publications online or by calling our toll-free publications line at (800) SEC-0330.

We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.