Image description: U.S. Navy Logistics Specialist 2nd Class Tommy Garland, right, performs a box jump in the hangar bay of the aircraft carrier USS Nimitz in the Gulf of Oman.
Department of Defense photo by Mass Communication Specialist 3rd Class Derek W. Volland, U.S. Navy.
By Michael Herndon, Consumer Outreach Officer for the Commodity Futures Trading Commission (CFTC).
Even seasoned investors sometimes miss out on doing a few things that will serve them well when working with an advisor. They usually interview the potential advisor to ask about how they have performed in the past, but too often investors don’t verify the advisor’s background or registration status with a government agency.
It is absolutely essential to check an advisor’s past record to make sure they are clear of violations and other problems. If you ask advisors if they are legitimate, of course they will tell you yes, and that they are registered as required. However, with a few quick phone calls or Internet searches you can confirm that information for yourself.
For individuals under the CFTC’s jurisdiction, consumers can find information in the National Futures Association’s Background Affiliation Status Information Center database (BASIC).
For other investments, you can research brokers, brokerage firms, and investment advisors and firms with this free tool from the Financial Industry Regulatory Authority, FINRA’s BrokerCheck.
Also, just a simple call to see if the financial professional has a business license or even searching his or her name on an online search engine can help.
My advice is to always consult THREE independent sources for background information before you invest with anyone or conduct any financial transaction.
Making financial decisions can be confusing and overwhelming, to the point that you do nothing to prepare for your financial future. But this Financial Literacy Month, we’re helping you understand finance basics so you can make money decisions with confidence.
Step one was understanding your credit.
Step two was planning and preparing for retirement.
Step three is learning how to manage your money wisely to prepare for major life events like going to college, buying a house or having a baby. No matter where you are in life these tools can help you:
Order the FREE Financial Foundations toolkit to get advice and confidence you need to make sound money decisions.
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