Investment Advisors (Stock Brokers/Financial Advisors)

First find a brokerage firm that fits your needs and other criteria. If you choose a full brokerage firm, then identify a broker that works for your needs.

When vetting a brokerage firm:

• Check into the condition of the company for which the broker works.
  • Is the company financially secure?
  • Does it have a history of financial security?
  • What is the company's legal history?
  • Keep in mind that The Securities Protection Investors Corporation insures brokerage accounts up to $500,000 plus up to $100,000 for cash claims. You can also ask how much additional insurance the firm carries.
• Find out the amount of the commission (transaction costs) or other fees including service fees. (The more you pay in fees, the lower your return).
• Ask about the firm's research and mutual fund offerings.
• Does the firm provide access to independent investment research?
• Does the firm provide free web planning tools? If so, do you find the tools user friendly?
• Smart Money Magazine publishes a broker survey every year that is worth checking out: www.SmartMoney.com

You can check on individual brokers through the following resources:

• Financial Industry Regulatory Authority: www.finra.org (see the "Investors" section)
• National Futures Association: www.nfa.futures.org
• To learn about an investment adviser's disciplinary record, see: www.adviserinfo.sec.gov
• To look into a broker's background, go to www.finra.org/Investors/ToolsCalculators/BrokerCheck

You can check the legal history of a brokerage firm through the following sources:

• National Association of Securities Dealers (self regulation). www.nasd.com , click on the BrokerCheck Program or call: 800.289.9999 (you can also check our individual brokers here for possible violations of securities laws.
• Your state securities regulator for possible violations of state securities laws. To locate your state agency see: www.consumeraction.gov/caw_state_resources.shtml

If you decide to use a full brokerage firm, look for a broker that:

• Has a track record of making money for clients - particularly clients who need to be more conservative in their investments.
• Will build an investment model based on your individual time horizons, goals, risk tolerance and tax situation.
• You feel comfortable talking about your financial and medical situation as well as your goals.
• Caution: Do not use any broker who makes promises about a rate of return he or she will earn you.

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