The federal or state securities laws have made it mandatory for brokers, investment advisers, and their firms to be licensed or registered in their particular states. They are also needed to make essential information public. However, it is up to you to search for that information and make use of it in protecting your investments. The good news is this information is easily available on the Internet.
Before you decide to invest or pay for investment advice, you should first make sure that your brokers or investment advisers have not previously had any disciplinary problems with regulators or their other investors. You need to also inquire from them if they have been registered or licensed by the governing body. It is vital to know this since recovering your money from unregistered securities brokerage companies who become bankrupt can be difficult even if the court rules in your favor.
You will find a lot of details about many brokers, and the particular firms that they work for once you search them on the Central Registration Depository (CRD). You will also find more details about these financial brokers about where they worked before and their educational backgrounds. You can also request your state securities regulator to provide you with more information form the Central Registration Depository as they can give you information especially when it comes to customers claims.
What You Should Know About Finances This Year
Once you check the registration status and record of your financial company, you need to find out whether or not the financial company is a member of the Securities Investor Protection Corporation (SIPC). SIPC does provide customers with protection if the financial firm becomes insolvent. You will not be qualified for compensation by SIPC if you place your money or securities in the hands of a financial company that is not a SIPC member as soon as the company goes out of business.
As soon as you decide on a few prospective companies, it is crucial to ask them a few questions during your meeting with them. Some of the questions you should ask are:
o Explain to me what experience you have in dealing with people, especially in my circumstances?
o Which college did you attend and what is your employment history?
o Which products and services do you give and whether you can vouch for other products or services to me?
o What method of payment do you accept for your services?
o Have you previously had a disciplinary action taken against by any government regulator for unprincipled conduct or have you ever been charged by a client who was not contented with the work you did?
The minute they answer all of these issues, you should compare all the financial companies and choose the company that you are comfortable working with.