How can a consumer check out Investment Brokers

Indeed, there is plenty to be said for due diligence in any endeavor. Today's world is fast paced and often laced with get-rich-quick schemes and shysters just waiting to steal our hard earned cash. Incredibly, the majority of people are parted from their money by not verifying the credentials of the people with whom they do business. Sadly, most individuals take others at face value and often overlook tell-tale signs of deceit. And when the means are available to investigate the background of persons with whom we conduct business, then we should use everything at our disposal. So, let us examine the question, "how can a consumer check out investment brokers?".

Do not believe everything the investment brokers tell you

Just because they say they are licensed and registered in your state, does not mean this is true. Fancy offices, phony diplomas and certificates, and answers for everything, tend to discourage potential clients or investors from checking into the brokers. Clients sometimes feel intimidated, and do not want to appear ungrateful or distrustful. And when they do ask questions, the answers provided seem plausible. The point, however, that everyone should recognize, is that there is no reason to sign anything with urgency. Taking the time to conduct due diligence will ultimately save both dollars and grief.

Always verify the investment brokers licenses, registrations, and any affiliations

Affiliations include any companies of which the brokers say they are staff members, and also any trade or professional organizations to which they claim to belong. Because securities and investments are highly regulated, this information is a matter of public record. And here are the best ways to verify whether the brokers are telling the truth or not.

  1. Call the Attorney General Office in your state of residence
    The staff, there, will at the very least notify you of the requirements to conduct business in your state. Remember that the licenses do not only include security specific licenses, but also vendors' permits, and other documentation required to legally operate a business and solicit clients.
  2. Call the organizations of which the brokers claim to be members and verify whether they are indeed members in good standing
    Their memberships should be current and without expiration.
  3. Call FINRA toll-free at (800) 289-9999
    They will provide specific information about licensing, registration and history of conduct for brokers and other representatives.
  4. Use the FINRA BrokerCheck® tool which is free
    This is a must before doing business with any investment broker or representative. The information will be invaluable, as it not only tracks individual brokers, but also, companies and firms. And, if there are any questions on your mind, or doubts about the brokers, phone calls to the toll free number are encouraged and welcomed.
  5. Contact specific state regulatory agencies
    To find the appropriate body in your state, use the North American Securities Administrators Association (NASAA) website to obtain contact numbers, addresses, and websites. You may also telephone the NASAA office, at (202) 737-0900, with questions and queries, although the call is long distance and, therefore, not free.
  6. Request information from both the Central Registration Depository (CRD) and the Investment Adviser Registration Depository (IARD)
  7. Follow up with the SEC
    The organization has an online search function to review both individuals and member firms.

You are the customer and you must get along with the investment brokers that you have chosen. Personality conflicts are a problem when money is concerned. Do yourself the favor and avoid brokers with whom you have no respect or with whom you cannot communicate in an amicable manner.