How to Check up on Your Broker

How to Check up on Your Broker

Having a stock broker can be a big stress reliever, as you can put a bulk of the direction and responsibility on a professional to ensure you’re making the right decisions. Particularly if you don’t know much about how the stock market works or which portfolio would be best for you, a stock broker can be a port in the storm.

However, just like with any professional you hire to manage your personal affairs, care must be taken to ensure they are working in your best interests. It can’t be stressed enough that the more research you can do on your broker, the better. Here are some handy tips to check up on your broker periodically to ensure he or she is doing the job they were hired for. First and foremost, you should contact a stock fraud attorney just in case you are given purposefully misleading advice.

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  1. Get everything in writing.Keep detailed records of all correspondence with your broker, documenting any and all transactions, conversations and deals. It’s good to keep notes about what you discuss and print out all reports you are given. Read them, and keep them on file rather than throwing them out.
  2. Do your due diligence on FINRA. Surprisingly, only 15 percent of investors have checked their advisor’s background or credentials with a state or federal regulator, says Forbes about a recent survey conducted the Financial Industry Regulatory Authority (FINRA). Check out the websiteFINRAwhere you can enter your broker’s name and check out their employment history, certifications, licenses, regulatory actions, complaints or violations.
  3. Ask lots of questions. Blindly accepting what you are told by your broker is unwise and could come back to haunt you later. Be attentive and thoughtful when taking in information about a certain stock, but always do your own research later to look into the company and verify what the broker is saying. Take some time to think before making a major move.
  4. The vast majority of brokers want you to be successful, but they can only help you achieve that if you open the lines of communication. Be clear about your goals and what you need a portfolio for. Whether you aggressively pursue stocks as part of your portfolio or take a more conservative approach will be dictated by where you are in life and what your end goals are.
  5. Follow up. Whenever you receive a statement, read it. Actually read it. Compare it to your own financial records and notes. Did you authorize all those transactions? Does something not look right? Pick up the phone and call your broker to ask. It can’t hurt. In fact, it may be a simple error on either end. Or it could be more sinister than that: your broker could be making unauthorized transactions on your behalf.

Take these tips into consideration to improve the relationship with your broker and keep him or her in check.

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