Check into the backgrounds of the broker and brokerage firm.
Before you send money to a broker who solicits your business, do some background research.
The NASD is the licensing agency which maintains records on all licensed brokers and firms. The NASD Public Disclosure Program allows investors to learn about their broker's employment history, prior customer complaints alleging sales practice violations, regulatory proceedings, and other questionable acts and practices. The Public Disclosure Program can be accessed by telephone at 1-800-289-9999 or via the Internet at http://www.nasdr.com.
In addition, every state has a state securities agency which can be a valuable source of information about brokers and brokerage firms. These sources can also tell you how long your broker has been licensed to sell securities in your state.
Keep in mind that the NASD and state securities divisions may be able to flag some dishonest brokers, but many complaints somehow never make it into these databases and they are only a reflection of past practices.
Print This Article
<<Return to Introduction
<<Previous Tip
>>Next tip
