Make an Informed Decision

A financial professional can have multiple titles and be authorized to provide multiple services, including investment, financial planning, and insurance products. Keep in mind that a professional title is not the same as a license. When researching a financial professional, find out what the titles and licenses mean, as well as the educational, work experience, and ethical requirements; check FINRA’s Investment Professional tool to understand the designations and the organizations that offer them. Remember, that the SEC, FINRA, and state regulators do not grant or endorse any professional titles.

When selecting a broker or investment advisor, research the person’s education and professional history as well as the firm the person works for. Ask:

  • Has the person worked with others who have circumstances similar to yours?
  • Is the person licensed in your state? Your state securities regulator lists individuals and firms that are registered in your state. Ask whether the regulatory office has any other background information.
  • Has the person had any run-ins with regulators or received serious complaints from investors? Call your local state securities regulator or the SEC. You can also check out Brokercheck to find licensing, employment, and disciplinary information.
  • How is the person paid? Is it an hourly rate, a flat fee, or a commission that depends on the investments you make? Does the person get a bonus from his or her firm for selling you a particular product?
  • What are the fees for setting up and servicing your account?

Additional organizations that could be helpful are:

  • The Commodity Futures Trading Commission (CFTC) provides consumer alerts and advisories. This agency also CFTC oversees the Reparations Program that resolves disputes between commodity customers and commodity professionals. You can institute “reparations” proceedings against commodity professionals registered with the CFTC if they violate the anti-fraud or other provisions of the Commodity Exchange Act.
  • Both the North American Securities Administrators Association and the National Futures Association can offer helpful information.
  • FINRA provides a dispute resolution program among investors, brokers, and brokerage firms.
  • offers unbiased information and strategies to help you avoid investment fraud.