Questions about Advisors and People Who Sell Investments

  • Are you registered with our state securities regulator? Have you ever been disciplined by the SEC, a state regulator, or other organization (such as NASD or one of the stock exchanges)?
  • How long has your firm been in business? How many arbitration awards have been filed against your firm?
  • What training and experience do you have? How long have you been in the business? What other firms have you been registered with? What is the status of those firms today?
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  • Have you personally been involved in any arbitration cases? What happened?
  • What is your investment philosophy?
  • Describe your typical client. Can you provide me with some names and telephone numbers of your long term clients?
  • How do you get paid? By commission? Amount of assets you manage? Another method?
  • Do I have any choices on how to pay you? Should I pay you by the transaction? Or a flat fee regardless of how many transactions I have?
  • Do you make more if I buy this stock (or bond, or mutual fund) rather than another? If you weren't making extra money, would your recommendation be the same?
  • Are you participating in a sales contest? Is this purchase really in my best interest, or are you trying to win a prize?
  • You've told me what it costs me to buy this stock (or bond, or mutual fund); how much will I receive if I sell it today?
  • Where do you send my order to be executed? Can we get a better price if we send it to another market?
  • If your financial professional changes firms, ask: Did they pay you to change firms? Do you get anything for bringing me along?
Investor Tip - Check Out Your Financial Professional

You can verify your broker's disciplinary history by checking the Central Registration Depository (CRD). Either your state securities regulator or NASD can provide you with CRD information. Your state securities regulator may give you more information from the CRD than NASD, especially when it comes to investor complaints, so you may want to check with them first. You'll find contact information for your state securities regulator on the website of the North American Securities Administrators Association.

You can find out about investment advisers and whether they are properly registered by reading their registration forms, called the "Form ADV." You can view an adviser's most recent Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website.

At present, the IAPD database contains Forms ADV only for investment adviser firms that register electronically using the Investment Adviser Registration Depository. You can also get copies of Form ADV for individual advisers and firms from the investment adviser, your state securities regulator, or the SEC, depending on the size of the adviser.