Protect Your Money: Conclusion

Conclusion

Once you've checked out the registration and record of your broker, adviser, or firm, there's more to do. For example, you should find out whether the brokerage firm and its clearing firm are members of the Securities Investor Protection Corporation (SIPC). SIPC provides limited customer protection if a brokerage firm becomes insolvent — although it does not insure against losses attributable to a decline in the market value of your securities. If you've placed your cash or securities in the hands of a non-SIPC member, you may not be eligible for SIPC coverage if the firm goes out of business.

Here are a few questions to get your started.

• What experience do you have, especially with people in my circumstances?
• Where did you go to school? What is your recent employment history?
• What licenses do you hold? Are you registered with the SEC, a state, or NASD?
• Are the firm, the clearing firm, and any other related companies that will do business with me members of SIPC?
• What products and services do you offer?
• Can you only recommend a limited number of products or services to me? If so, why?
• How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
• Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did?
• For registered investment advisers, will you send me a copy of both parts of your Form ADV?

For more questions and additional tips, be sure to read our publications, Ask Questions and Get the Facts on Saving and Investing. In addition, although the SEC cannot recommend or endorse any particular entity, there are a number of non-profit educational and consumer organizations that offer free tools to help investors check financial professionals. For example, AARP offers a Financial Adviser Questionnaire, and the Certified Financial Planner Board of Standards has a Checklist for Interviewing a Financial Planner.

http://www.sec.gov/investor/brokers.htm